A day after the American Petroleum Institute reported yet another inventory build estimate, at close to 10 million barrels, the Energy Information Administration confirmed a build, saying inventories of crude oil in the U.S. had gained another 9 million barrels in the week to April 24.
This comes after an inventory build of a massive 15 million barrels for the previous week, itself following a record-breaking weekly addition of 19.2 million barrels for the second week of April.
Analysts expected a build of 10.6 million barrels for last week.
The EIA also reported a draw of 3.7 million barrels in gasoline, with average daily production of 6.7 million bpd. This compared with an inventory build of 1 million barrels for a week earlier, which was quite modest compared to previous gasoline builds, and an average production rate of 6.2 million bpd.
In distillate fuels, the EIA reported an inventory build of 5.1 million barrels and daily production of 5 million bpd for the week to April 24. This compared with an inventory build of 7.5 million barrels a week earlier and average production of 5 million barrels daily.
A day before it released its latest weekly inventory report, the EIA said that 2019 was the first year since 1957 when energy production in the United States had exceeded consumption. The sharpest rise in energy production came, unsurprisingly, from natural gas and crude oil.
This year will likely look much differently. Consumption, for one thing, has suffered a severe blow from the coronavirus pandemic and the resulting lockdowns. Now these are beginning to be eased in some states, but it will be a while before life returns to normal.
At the same time, oil producers are shutting in wells in response to persistently low prices and the absence of a discernible price floor under West Texas Intermediate and other regional blends. This, coupled with the fall in production from companies forced to file for bankruptcy, will lead to a significant decline in energy production as well.
By Irina Slav for Oilprice.com
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