Large Unexpected Crude Build Sinks Oil Prices
Crude oil inventories in the United States saw a colossal build of 8.7 million barrels during the week ending January 31, according to the U.S. Energy Information Administration.
Crude oil prices were trending lower today prior to the release of the U.S. Energy Information Administration, with both the WTI and Brent benchmarks trading down more than one percent.
Today’s build in crude inventories is in line with seasonal trends—if not larger--and compares with a large build of 3.5 million barrels in the week prior.
For total motor gasoline, the EIA estimated that inventories rose by 2.2 million barrels for the week to January 31, with production averaging 9.2 million barrels daily. This compares with an inventory rise of 3.0 million barrels for the previous week and average daily production of 9.2 million barrels daily.
For middle distillates, the EIA estimated an inventory fall of 5.5 million barrels for last week, with production averaging 4.6 million barrels daily. This compares to an inventory loss of 5 million barrels for the week prior, when production stood at an average 4.7 million barrels daily.
Total products supplied over the last four weeks averaged 20.6 million barrels per day—a 3.3% increase over this time last year. Distillates products supplied over the last four weeks is also up, at 13.7% compared to this time last year, while gasoline product supplied was down 0.2%.
With the rising inventories, crude oil prices are down week over week, with WTI down roughly $1 per gallon.
Shortly after data release, Brent crude was trading at $75.12 per barrel, with West Texas Intermediate at $71.60 per barrel, both down from opening.
On Tuesday, the API issued its latest estimates on crude oil and crude oil products inventories showing that crude oil inventories had risen by a whopping 5.025 million barrels for the week ending 31, with gasoline stocks rising by 5.426 million barrels and distillate inventories falling by 6.979 million barrels. The API estimated that Cushing inventories had risen by 110,000 barrels.
By Julianne Geiger for Oilprice.com