Not even the combination of OPEC and Russia talk can keep oil prices up after this week’s American Petroleum Institute report, released Wednesday, which showed a 2.7 million build – the first increase in U.S. supplies in six weeks and the largest single inventory increase in the last six months.
Experts had expected a large build of 2 million in crude oil for this week—but 2.7 million exceeded even this pessimistic figure, and the already unsteady markets appear rattled.
The large build report caused a notable weakness in West Texas Intermediate prices, which were trading down 1.46% at $50.05 after the data was released, with Brent down 1.26% at $51.75.
This build will either be confirmed or denied by the U.S. Energy Information Administration (EIA) report to be released tomorrow—a day later than normally scheduled due to this week’s holiday schedule.
API also reported a gasoline build of 688,000 barrels, in sharp contrast to analyst experts’ anticipated 900,000-barrel draw.
Distillate supplies declined by more than 4.5 million barrels, marking the third straight week of draws in that type of fuel. The distillate withdrawals were particularly high last week – the highest since October 2014 – due to the effects of Hurricane Matthew.
Oil supplies at the Cushing, Oklahoma, facility saw a 1.35 million-barrel dive, as opposed to the 100,000-barrel build that analysts anticipated.
Crude oil inventories in the U.S. reached 499.7 million barrels in the week ending on September 30, the EIA reported last week, down by 3 million barrels from the previous week.
Brent crude hit a high of US$51.72 a barrel in European trading last Wednesday, up $0.83, which is its highest since early June, on the back of API’s super positive estimate and positive signs that OPEC may curb—to whatever extent—its output. West Texas Intermediate was also up $.075 last Wednesday following last week’s EIA figures to $49.44 a barrel.