Oil prices slide on yet another surprise inventory build

The American Petroleum Institute (API) reported on Tuesday a build in crude oil inventories of 12.792 million barrels for the week ending March 5.

Analysts had predicted an inventory build o 816,000 barrels for the week.

In the previous week, the API reported a major build in oil inventories of 7.356-million barrels after analysts had predicted a 928,000-barrel draw. But that was nothing compared to the EIA’s report a day later of a 21.6 million barrel build.

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It is unclear whether today’s reported stock build is part of EIA’s large build reported last week, or whether we will see another large build from the EIA tomorrow.

Oil prices slid further on Tuesday ahead of the data after a couple days of price rallying courtesy of the Houthi rebels, who claimed Sunday’s attack on Saudi oil infrastructure.

At 3:19 p.m. EDT, before Tuesday’s data release, WTI had fallen by $0.99 on the day (-1.52%) to $64.06. Although down for the day, WTI is still trading up more than $4 per barrel over this time last week.

The Brent crude benchmark had also fallen on the day, $0.75 at that time (-1.10%) to $67.49—also more than $4 per barrel up on the week.

U.S. oil production rose by 300,000 bpd barrels per day to 10.0 million bpd, according to the Energy Information Administration.

Enbridge tanks at Cushing as of March 5. Image courtesy of GeoSpatial Insight

The API reported another large draw in gasoline inventories of 8.499 million barrels for the week ending March 5—on top of the previous week’s 9.933-million-barrel draw. Analysts had expected a 3.467-million-barrel draw for the week.

Distillate stocks saw a large decrease as well, of 4.796 million barrels for the week, after last week’s 9.053-million-barrel decrease.

Cushing inventories rose by 295,000 barrels. Last week, inventories at the Cushing oil hub increased by 732,000 barrels.

Post data release, at 4:35 p.m. EDT, the WTI benchmark was trading at $63.79, while Brent crude was trading at $67.22.