The latest American Petroleum Institute (API) inventory data for the week ending July 14th recorded a build 1.63 million barrels after the draw of 8.13 million barrels last week.
Markets were expecting a draw of around 3.0 million barrels for the week with API reverting to the pattern of recording an unexpected increase in stocks.
Gasoline was reported as a draw of 5.45 million barrels following a draw of 0.8 million barrels the previous week. Distillate registered a draw of 2.9 million barrels after the build of 2.1 million barrels previously.
The fuel data had a significant impact in cushioning the market and offsetting the headline data, especially with optimism that the gasoline draw would help underpin refinery utilisation and support crude demand.
Cushing registered a build of 0.61 million barrels which was the first build in 15 weeks.
Oil prices secured net gains on Tuesday with eventual consolidation just below $46.50 p/b in WTI. Supply and demand factors were in relatively close balance with a weak dollar providing significant underlying support to prices during the day.
From around $46.45 p/b ahead of the release, prices very briefly moved higher to the $46.60 p/b level before reversing sharply to near $46.10 and consolidating around $46.25 in choppy trading conditions.
Wednesday’s EIA inventory release will again have a significant impact with all metrics under scrutiny. The US Energy Department expected shale output to increase in August for the 8th successive month and markets will be expecting a further increase in weekly production.
scrutiny. The US Energy Department expected shale output to increase in August for the 8th successive month and markets will be expecting a further increase in weekly production.