The latest American Petroleum Institute (API) report on Tuesday showed crude oil supplies rose to their highest point in ten weeks despite expectations of a 3 million barrel draw.
The API said crude oil defied the anticipated draw, recording a 2.2 million barrel build instead. Gasoline and distillates also reported major builds of 1.5 million barrels and 2.6 million barrels, respectively.
Investors had expected a 900,000-barrel draw for supplies at the Cushing Oil Hub in Oklahoma. However the API said it was a much smaller figure at 166,000 barrels.
Oil futures tumbled following the information from the API with August futures dipping in electronic trading from US$46.80 to US$46.44.
Oil prices jumped prior to the API report and rose by nearly 5 percent, which represents their biggest gains since last April 8. Brent crude futures rose US$2.22, or 4.8 percent, to close at US$48.47 per barrel. West Texas Intermediate crude futures rose US$2.04, or 4.6 percent, to end the day at US$46.80.
The prices had seen gains following new Organization of the Petroleum Exporting Countries (OPEC) data showing that, according to Reuters, "the market was likely to achieve balance in supply-demand by next year."
The most recent API study came out one day before the latest figures on official inventory data from the U.S. government's Energy Information Administration.
The prior API report published on 5 July showed that crude was hit by the biggest drawdown in over a year at approximately 6.7 million barrels. This ran contrary to expectations of a 2.5 million barrel build; thus, crude prices subsequently spiked.
By Erwin Cifuentes for Oilprice.com
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Erwin Cifuentes is a Contributing Editor for Southern Pulse Info where he focuses on politics, economics and security issues in Latin America and the Caribbean.… More