The Energy Information Administration reported a 2.8-million-barrel build in U.S. commercial oil inventories, a day after the American Petroleum Institute estimated the inventories had expanded by 2.93 million barrels, pressuring benchmark prices.
At 488 million barrels, commercial inventories are within seasonal limits, though near the upper end. This is some improvement on summer 2016, when inventories were consistently above the maximum for the season. The EIA does not provide reference data for average seasonal limits.
Oil rig additions are continuing across the shale patch, with last week seeing the largest seven-day increase in years, by 35 rigs, suggesting local output will only continue to grow, despite struggling oil prices.
The EIA said in its report for the week to January 20 that gasoline inventories rose by a hefty 6.8 million barrels last week, with average daily production at 8.8 million barrels. This was slightly under the previous week’s figure, which was 9 million bpd.
Refineries operated at 88.3 percent of capacity, also producing 4.6 million barrels of distillate daily, a bit down from the previous week’s 4.7 million bpd.Related: Aramco Pulls Out Of Joint Venture Talks With Petronas
Imports, according to the EIA, averaged 7.8 million barrels daily, down from the 8.4 million barrels reported for the week to January 13.
Last week saw several news and analyst reports that strongly suggest that the U.S. shale oil industry is back in growth mode, inevitably fueling doubts about the global oversupply situation.
These doubts were somewhat quenched by a recent announcement from the OPEC-Russia camp that said it was setting up a special committee to make sure all signatories to the production cut deal keep their end of the bargain, but this wasn’t enough to prop up prices or at least make them more resilient to the weekly inventory reports coming from the API and EIA, which according to some commentators, are irrelevant to actual demand and supply in the world’s biggest crude oil consumer..
At the time of writing, WTI was trading at US$52.91 a barrel, and Brent crude was selling for US$55.04, both down by less than 1 percent.