A day after the American Petroleum Institute reported sizeable builds in fuel inventories, the Energy Information Administration confirmed a build in gasoline and distillate inventories for the week to December 28, and substantial ones, at that.
Gasoline inventories added 6.9 million barrels, while distillate fuel inventories rose by as much as 9.5 million barrels in the reporting period. A week earlier, gasoline inventories went up by 3 million barrels, with distillate fuel remaining flat on the week.
The authority reported crude oil inventories remained virtually unchanged on the week but at 441.4 million barrels, inventories are 8 percent above seasonal limits – a fact likely to increase the chronic anxiety on oil markets.
Gasoline production in the final week of 2018 averaged 9.5 million barrels daily, the EIA also reported, with distillate fuel production at 5.6 million barrels daily. These figures compared with 10.1 million bpd of gasoline produced a week earlier and 5.4 million bpd of distillate fuel. Refineries last week processed an average of 17.4 million bpd in the week to December 28.
Oil prices started the year on the seesaw, with sharp rises and drops within a single trading session as the market weighed the potential effects of events such as the entry into effect of the OPEC+ agreement to cut 1.2 million bpd from their combined production and news such as the reports of Saudi Arabia cutting its exports in December to prop up prices. One analyst told CNBC earlier this week the “Saudis are trying to engineer a fall, if not plunge, in U.S. crude oil inventories to give the appearance of global tightness.”
At the time of writing, Brent crude traded at US$58.06, up by 3.77 percent, and West Texas Intermediate changed hands for US$48.95 a barrel, up by 3.95 percent from yesterday’s close. The improvement is likely a result of the OPEC cuts entering into effect as well as hopes for a trade deal between Washington and Beijing.
By Irina Slav for Oilprice.com
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