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Surprise Crude Build Pushes Oil Prices Further Down

Heavy crude

The American Petroleum Institute (API) has estimated a surprise crude oil inventory build of 1.38 million barrels for the week ending September 19, compared to analyst expectations of a 768,000-barrel draw.

Last week saw a surprise build in crude oil inventories of 592,000 barrels, according to API data. The EIA estimated that week that there was larger inventory build of 1.1 million barrels.

After today’s inventory move, the net draw for the year is 23.93 million barrels for the 39-week reporting period so far, using API data.

Oil prices were trading down more than 1% on Tuesday prior to the data release, once again on global demand fears on the back of disappointing economic data from Japan and Germany. The price fall is despite the attack on Saudi Aramco’s infrastructure that saw 5.7 million barrels of production taken offline daily. Oil prices rose immediately following the attacks, but quickly came back close to pre-attack levels in the days that followed.

At 12:49pm EDT, WTI was trading down $1.00 (-1.71%) at $57.64—a $2.00 fall from this time last week. Brent was trading down $1.17 (-1.84%) at $62.56, or a $1.50 per barrel increase over last week’s levels.  

The API this week reported a build of 1.9 million barrels of gasoline for week ending September 19. Analysts predicted a build in gasoline inventories of 296,000 barrels for the week.

Distillate inventories fell by 2.2 million barrels for the week, while inventories at Cushing rose by 2.3 million barrels.

US crude oil production as estimated by the Energy Information Administration showed that production for the week ending September 13 stayed at 12.4 million bpd for the third week in a row.

At 4:42pm EDT, WTI was trading at $57.08, while Brent was trading at $61.73.

By Julianne Geiger for Oilprice.com

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