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The American Petroleum Institute (API) reported a surprise crude oil inventory build of 3.45 million barrels for the week ending December 14, compared to analyst expectations that we would see a draw in crude oil inventories of 2.475 million barrels.
Last week, the API reported a draw of over 10 million barrels. A day later, the EIA had a rather sober report showing a much smaller 1.2-million-barrel draw.
Leading up to today’s data release from the API, crude oil prices were trading sharply down, with WTI trading comfortably below $50 per barrel.
At 11:16am EST WTI was trading down $2.23 (-4.44%) per barrel at $47.97—almost $4 per barrel less than last Tuesday. Brent crude was trading down $1.97 (-3.30%) at $57.64, almost $3 down week on week. Today’s price slide reflects the growing worry of continued inventory overhangs in the United States, despite the newly hatched OPEC and non-OPEC agreement to cut inventories starting in the new year.
Inventories in the Cushing, Oklahoma facility this week had climbed by 1.063 million barrels.
The API reported a build in gasoline inventories as well for week ending December 14 in the amount of 1.76 million barrels. Analysts had predicted a build of 1.025 million barrels for the week.
US crude oil production as estimated by the Energy Information Administration was also bearish in nature, showing that production for the week ending December stood 11.6 million bpd after four weeks of 11.7 million bpd—a high for the United States.
Distillate inventories fell this week by 3.442 million barrels, compared to an expected build of 391,000 barrels.
The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30a.m. EST.
By 4:35pm EST, WTI was trading down at $46.37 and Brent was trading down at $56.17.
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.