A day after the American Petroleum Institute’s weekly inventory estimate slowed down the price decline in West Texas Intermediate, the Energy Information Administration dampened optimism by reporting a build of 4.9 million barrels in U.S. crude oil inventories for the week to November 16.
This followed an inventory build of 10.3 million barrels for the prior week, which added weight to already falling prices on the back of rising production and global economic growth skepticism.
The authority also said refinery run rates last week averaged 92.7 percent, with throughput at 16.9 million barrels daily, up from last week, and gasoline production at 10 million bpd. Distillate fuel production averaged 5.2 million bpd. This compares with 10.1 million bpd in gasoline production a week earlier and 5 million bpd in distillate fuel production.
Gasoline inventories brought some joy for oil bulls. They fell by 1.3 million barrels last week but are still above the average. Distillate fuel inventories shed 100,000 barrels in the week to November 16. This compares with a 1.4-million-barrel draw in gasoline inventories and a 3.6-million-barrel decline in distillate fuel inventories a week earlier.
Meanwhile, after yesterday oil price fell by as much as 6 percent for Brent and more for WTI after President Trump said he would stick by Saudi Arabia despite the Khashoggi affair, saying prices would be “through the roof” if the U.S. broke up with its Middle East ally.
Today, however, prices have recouped some of the losses as OPEC is talking about more production cuts less than six months after it decided to end the first cuts and begin raising production. News that India’s crude oil imports hit a seven-year high in October also helped prices inch up.
The improvement has been reluctant, however, as economic concern remains. Yesterday, IEA’s Fatih Birol said, as quoted by Reuters, the global economy remained vulnerable to shocks, which brought unprecedented uncertainty for oil markets.
By Irina Slav for Oilprice.com
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