The American Petroleum Institute (API) reported a build of 882,000 barrels in United States crude oil inventories, compared to analyst expectations that markets would see a draw of 2.3 million barrels for the week ending May 12. This week’s build ends a run of five draws over the last six weeks, using API data.
Gasoline inventories fell by 1.88 million barrels, according to the API. Gasoline inventories continue to worry markets, as refiners continue to turn crude oil into gasoline above demand for the fuel.
While there was tough talk from Saudi Arabia and Russia this week, which dangled the idea of extending the oil production cuts into 2018—followed by dutiful member support for the extended extension, including Oman, Venezuela, Kuwait, Iran (with conditions), and even non-compliant Iraq—prices were unable to hold any significant gains.
Further dampening spirits, the IEA’s Oil Market Report on Tuesday foretold of a 2017 that would not see oil inventories return to its five-year average—an important milestone that many equate with the rebalancing.
While prices this week have gained over last week, oil prices fell again on Tuesday despite OPEC’s efforts. WTI was trading down 0.18% at 2:14pm EST at $48.76 (+$2.89 over last week) and Brent Crude was trading down 0.08% at $51.78 (+$3.09 over last week).
Gasoline prices were up at 2:17pm EST 0.58% at $1.6047—up almost 12 cents from last week.
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Distillate inventories rose this week by 1.8 million barrels, and inventories at the Cushing, Oklahoma, site fell by 500,000 barrels.
By 15:59 pm CST, both WTI and Brent Crude had fallen on the disappointing news, and were trading at $48.29 and $51.30 respectively.
The U.S. Energy Information Administration report on oil inventories is due Wednesday at 10:30 a.m. EDT.