After on Tuesday the API accelerated the price slide that began last week with an estimated crude oil inventory build of 7.83 million barrels, the EIA added fuel to the bearishness by reporting a build in inventories of 5.8 million barrels for the week to November 12.
The authority also reported gasoline inventories went up by 1.9 million barrels last week, versus a decline of 3.2 million barrels in the prior week. Distillate fuel inventories shed 3.5 million barrels last week, versus a decline of 4.1 million barrels a week earlier.
Gasoline production last week averaged 9.7 million barrels daily, the EIA also said, compared with 10.4 million bpd a week earlier. Distillate fuel production stood at 5 million bpd, virtually flat on the week.
Oil bulls are still reeling from the lukewarm reaction of oil markets to the re-imposed U.S. sanctions against Iran, caused in no small part by the granting of sanction waivers to eight countries that import Iranian crude. Although Secretary of State Mike Pompeo took care to warn that the waivers are temporary, and although national security advisor John Bolton said that more sanctions are coming, prices remained flaccid, with West Texas Intermediate trading at US$62.39 a barrel and Brent at US$72.56 a barrel at the time of writing.
The EIA’s latest Short-Term Energy Outlook didn’t do much to boost optimism in the bull’s corner either. The authority said it expected Brent crude prices to average US$72 a barrel in 2019, with WTI trading at a discount of US$7 a barrel to the global benchmark.
Rising shale production is putting the United States on course to hit the 12 million bpd oil production mark sooner than previously forecast, the EIA said in the report, reinforcing the suspicion that the world could swing into an oil glut again sooner than previously believed possible, sanctions and all.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com: