Oil Under Pressure As API Reports Large Crude, Product Builds

Crude oil inventories rose by another 6.33 million barrels last week, the American Petroleum Institute (API) data showed on Tuesday, on top of last week’s 3+ million barrel build.

U.S. crude inventories increased 13 million barrels last year, according to API data, while crude stored in the nation’s Strategic Petroleum Reserves sunk by 221 million barrels. This week, SPR inventory held steady for the third week in a row at 371.6 million barrels as the emergency releases that the Biden Administration announced last spring are now complete. The SPR now contains the least amount of crude oil since early December 1983.

Oil prices were a mixed bag on Tuesday in the runup to the data release. At 2:39 p.m. EST, WTI was trading up $0.88 (+1.13%) on the day to $78.78 per barrel—a weekly increase of roughly $1.30 per barrel. Brent crude was trading down $0.47 (-0.55%) on the day at $84.43—a weekly decrease of about $1.80 per barrel.

U.S. crude oil production stayed at 12.2 million bpd for the third week in a row for week ending January 20—it is the highest production rate since last August. U.S. production is still  900,000 bpd lower than the peak production seen in March 2020.

WTI was trading at $79.13 shortly after the data release.

Gasoline inventories rose by 2.73 million barrels after last week’s API data showed the fuel inventories rising by 620,000 barrels. Distillates rose 1.53 million barrels after falling by 1.929 million bpd in the week prior.

Inventories at Cushing, Oklahoma, increased by 2.72 million barrels on top of the 3.378-million barrel hike reported last week.

By Julianne Geiger for Oilprice.com

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