Crude Oil Prices Continue Lower After Huge EIA Inventory Increase
Oil prices made a massive bearish reversal yesterday and today the selling pressure continues, with WTI crude falling below $72 a while ago. Crude Oil inventories showed a massive buildup as well, with the API private inventories yesterday coming above 10 million barrels, while the EIA inventories showed a buildup of more than 5 million barrels.
Oil prices have surged this month due to the potential for a broader Middle Eastern conflict, with U.S. WTI crude surpassing $78 by Monday morning, reflecting an increase of more than $10 overall. This upward momentum, however, paused as uncertainty grew regarding Israel’s potential response to Iran. Today, crude oil futures fell by nearly $3, with WTI dropping below $72 after a more than $4 decline the previous day.
Additionally, energy prices faced downward pressure as Chinese officials failed to meet expectations at a recent press briefing by not announcing any new economic stimulus initiatives. Looking ahead, developments in the Middle East will likely be the key drivers of short-term oil price movements.
US WTI Chart Daily – The Reversal Has Been Brutal Too
EIA Weekly U.S. Oil Inventory Data:
- Crude Oil Inventories: Increased by +5.81 million barrels, significantly above the expected rise of 2.048 million barrels. This larger-than-anticipated build suggests a higher supply level.
- Gasoline Inventories: Decreased by -6.304 million barrels, sharply contrasting with the expected decline of 1.123 million barrels. This larger drawdown reflects robust gasoline demand or reduced gasoline production.
- Distillate Inventories: Fell by -3.124 million barrels, surpassing the anticipated draw of 1.865 million barrels, indicating strong usage or constrained production in distillates such as diesel and heating oil.
- Refinery Utilization: Declined by -0.9%, more than the forecasted 0.1% reduction. Lower refinery utilization can point to reduced refining activity, which may impact fuel production rates.
Private Oil Inventory Data (from the API):
- Crude Oil: Notably large build of +10.9 million barrels, underscoring an excess in crude supply that may affect market prices.
- Gasoline: Moderate drawdown of -557,000 barrels, suggesting steady demand but a less drastic reduction compared to EIA data.
- Distillates: Decline of -2.59 million barrels, highlighting continued demand and tighter supply conditions.
US WTI Crude Oil Live Chart
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