The American Petroleum Institute (API) reported a draw of 840,000 barrels in United States crude oil inventories, compared to analyst expectations for a healthier crude oil draw of 1.5 million barrels. While that news is particularly shocking, gasoline inventories saw a rather unexpected build of 1.374 million barrels-analysts were expecting a 2.2-million-barrel draw for the fuel instead.
Last week, the API reported a 1.3-million-barrel draw for crude oil inventories for week ending April 7, while the EIA reported a 2.2-million-barrel draw.
Distillates saw a 1.8-million-barrel draw compared after a 1.6-million-barrel draw last week.
Inventory at the Cushing, Oklahoma, site fell by 672,000 barrels, following another draw last week of 358,000 barrels.
Oil markets winced early on Tuesday after Saudi Arabia's Energy Minister Khalid A. Al-Falih told reporters in Riyadh that "it is premature to talk about extending the cut," dampening the excitement The Kingdom incited previously by saying it would be willing to extend the cuts.
Further weighing on prices was the EIA's Drilling Productivity Report from Monday, which showed that U.S. oil production is expected to increase by 124,000 bpd in May over April-the largest monthly increase since February 2015.
As of 4:30PM, EST on Tuesday, WTI was trading down .04% at $52.63, with Brent Crude trading down .049% at $55.09. Gasoline was also trading down 0.38% at $1.713.
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This week's draw in crude oil inventories is the seventh draw in the last sixteen weeks, using API data, with the API still reporting an overall hefty build over the previous 15 weeks of roughly 37.1 million barrels.
The disconnect between the API's and EIA's data is significant, with the EIA reported only three draws over the last fifteen weeks, with a total build of 47.3 million in that timeframe.
Almost a half hour after data release, WTI had slipped further to $52.30, and gasoline had fallen to $1.70. By 4:54PM EST, Brent Crude had fallen to $54.78.
Tomorrow at 10:30am EST, traders will be hanging on the EIA data to see if it agrees with this week's gasoline build as reported by the API.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
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