The American Petroleum Institute (API) reported a build of 1.91 million barrels in United States crude oil inventories, compared to fairly accurate expert predictions that domestic supplies would see a 2-million-barrel build.
Oil prices had risen earlier on Tuesday on news of a force majeure of Sharara crude from Libya’s Zawiya terminal and of Wafa condensate loadings from Mellitah terminal, taking 252,000 barrels per day off the top of Libya’s production figures. It has been an industry fear that Libya’s production, exempt from OPEC’s production cuts, would undo OPEC’s efforts to collectively curtail production.
By 4:00pm EST, the news about Libya’s lowered output perked up prices somewhat—tempered by fears of high US supplies—and the WTI benchmark was trading up 1.34% at $48.37 per barrel—almost 10 cents per barrel above last week’s levels. Brent was trading up 1.12% at $51.32 per barrel, about 30 cents above last week figures.
Tuesday prices were also buoyed by OPEC-member and analyst chatter that surmised the OPEC cut agreement would be extended beyond June.
The chart below shows that the API is still showing an overall hefty build over the previous 13 weeks of roughly 41 million barrels.
(Click to enlarge)
Cumulative builds/draws API data since January 4 2017
Inventories at the Cushing, Oklahoma, facility fell this week by 576,000 barrels after weeks of builds.
While experts expected another draw week for gasoline—this time a 2-million-barrel draw—the market was disappointed by the smaller 1.104-million-barrel draw.
Distillates also saw a draw this week of 2.035 million barrels, continuing its streak of draws over multiple weeks.
Both benchmarks began to slide after API released the data, with WTI trading up 1.32% at $48.36 around 5:00pm EST, with Brent trading up 1.06% at $51.29 per barrel. All eyes will be on tomorrow’s EIA report to see if it backs up today’s API figures. Any significant discrepancy tomorrow will likely move both benchmarks.
By Julianne Geiger for Oilprice.com
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