U.S. Crude and Products Builds Send Oil Prices Lower

Crude oil inventories in the United States rose this week by 594,000 barrels for week ending December 1, according to The American Petroleum Institute (API), after a 817,000-barrel draw in crude inventories in the week prior. Analysts had expected inventories to go in a different direction, anticipating a 2.267 million barrel draw.

API data shows a net build in crude oil inventories in the United States of nearly 21 million barrels so far this year.

On Monday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 300,000 barrels. Inventories are now 351.9 million barrels, with total purchases for the SPR coming in just over 5 million barrels since the Biden Administration began its buyback program.

Oil prices were trading down ahead of API data release as the market continues to hang on to its disappointment over OPEC+’s resolution to carry over 1.5 million bpd of cuts into the new year, with an additional 600kbpd of voluntary cuts from members other than Saudi Arabia and Russia. At 3:18 pm ET, Brent crude was trading down 0.78% at $77.42—more than $4 per barrel short of where it was this same time last week. The U.S. benchmark WTI was trading down on the day by 0.66% at that time, at $72.56 –just under $4 per barrel below this time last week.

Gasoline inventories rose this week by 2.83 million barrels, on top of the 898,000-barrel decrease in the week prior. As of last week, gasoline inventories were still 2% below the five-year average for this time of year.

Distillate inventories also rose this week, with a gain of 890,000 barrels. Last week, distillates rose by 2.806 million barrels in the week prior. Distillates are roughly 11% below the five-year average.

Cushing inventories saw the largest increase this week, rising by 4.28 million barrels, after falling by 465,000 barrels in the previous week.

By Julianne Geiger for Oilprice.com

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