Surprise Crude Build Reverses Earlier Oil Price Gains

The American Petroleum Institute (API) has estimated a surprise crude oil inventory build of 3.7 million barrels for the week ending Aug 8, compared to analyst expectations of a 2.761-million barrel draw.

The inventory build this week compares to last week’s draw of 3.4 million barrels, according to API data. A day later, the EIA contradicted the API report, estimating that there was an inventory build instead--of 2.4 million barrels.

After today’s inventory move, the net draw for the year is 4.53 million barrels for the 33-week reporting period so far, using API data.

Oil prices were trading up on Tuesday prior to the data release as the market clawed its way back up after reaching 2019 lows last week as prospects for demand growth dimmed in the wake of the ongoing trade dispute between China and the United States. 

At 10:54am EST, WTI was trading up $1.8 (+3.33%) at $56.760—roughly $3 up from last week’s price. Brent was trading up $2.08 (+3.55%) at $60.65—smaller gains from last week than was seen in WTI, but still $1.50 up on the week.  

The API this week reported a 3.7-million-barrel increase in gasoline inventories for week ending Aug 8. Analysts predicted a draw in gasoline inventories of 810,000 barrels for the week.

Distillate inventories fell by 1.3 million barrels for the week, while inventories at Cushing fell by 2.5-million barrels.

US crude oil production as estimated by the Energy Information Administration showed that production for the week ending August 1 rebounded to 12.3 million bpd, just 100,000 bpd off the all-time high of 12.4 million bpd.

The U.S. Energy Information Administration report on crude oil inventories is due to be released at its regularly scheduled time on Wednesday at 10:30a.m. EST.

By 4:43pm EST, WTI had started to slip, but still trading up on the day at $56.94 while Brent traded up as well at $61.15.

By Julianne Geiger for Oilprice.com

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