Oil prices dropped around noon…
Just a few months after…
The American Petroleum Institute reported a 4.464 million barrel increase in U.S. crude oil inventories in the biggest build in crude supplies in four months.
These figures are in stark contrast to a survey by Reuters earlier today, which showed an expert consensus for a 0.5 million-barrel draw in crude oil inventories. Similarly, Zero Hedge’s sources expected an 850,000 barrel draw this week, while analysts polled by S&P Global Platts expected a 200,000-barrel rise in U.S. crude inventories. No estimates expected the massive increase in inventory.
Gasoline inventories decreased by 2.2 million barrels – and if confirmed by tomorrow’s EIA figures, this would be the fourth weekly draw for the energy source in a row. Distillates also experienced an 834,000 barrel draw.
West Texas Intermediate prices fell lower after the release of the new data, in light of the high inventory build-ups. However, the actual supply numbers will be released tomorrow in a report by the federal Energy Information Administration.
In light of the new energy supply configuration, analysts at Goldman Sachs predict that even if the Organization of Petroleum Exporting Countries (OPEC) agree on a production freeze next month, the move will be self-defeating as net energy importer nations begin buying energy supplies en masse to hedge against higher prices.
This week, supplies at the storage facilities at Cushing increased by 417,000 barrels according to the API figures, against a more conservative expected 200,000-barrel build. In the week prior, crude inventories at the site were down by 680,000 barrels according to actual EIA data.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…