The American Petroleum Institute (API) estimated on Tuesday a surprise crude oil inventory draw of 421,000barrels for the week ending March 13, as the hustle and bustle of everyday life in the United States slows, taking a chunk of oil demand with it.
Today's inventory draw was expected to be a build of 2.933-million-barrels.
In the previous week, the API estimated a large crudebuild in crude oil inventories of 6.407-million barrels, while the EIA's estimates were more bearish, reporting a largerbuild of 7.7 million barrels for the week.
Oil prices were trading down on Tuesday afternoon prior to the API's data release, highlighting the still difficult oil price environment stemming from the coronavirus and exacerbated by the oil price war that Russia and Saudi Arabia are waging. As crude oil is facing a difficult demand environment, Saudi Arabia, Russia, and the UAE are all planning to unleash a flood of cheap crude on the market, sparking concern.
At 2:07 pm EDT on Tuesday the WTI benchmark was trading down on the day by $0.60 (-2.09%) at $28.10-down nearly $6 week on week. The price of a Brent barrel was also trading down on Tuesday, by $0.65(+2.05%), at $31.04-down by roughly $7 week on week.
The API reported a large draw of 7.834 million barrels of gasoline for week ending March 13, after last week's 3.09-million-barrel draw. This week's draw compares to analyst expectations for a 3.0-million-barrel draw for the week.
Distillate inventories were also down, by 3.625 millionbarrels for the week, compared to last week's 4.679-million-barrel draw, while Cushing inventories rose by 66,000 barrels.
US crude oil production as estimated by the Energy Information Administration showed that production for the week ending March 06 slipped back to 13.0 million bpd.
At 4:42 pm EDT, WTI was trading at $26.85 while Brent was trading at $30.29.
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