Oil Slides as EIA Confirms Large Crude Inventory Build
Oil Slides as EIA Confirms Large Crude Inventory Build | OilPrice.com
Crude oil prices moved lower today after the U.S. Energy Information Administration reported an inventory increase of 5.8 million barrels for the week to October 4.
The change in inventory levels compared with a build of 3.9 million barrels for the previous week. It also follows an estimated inventory increase of a sizable 10.9 million barrels, as reported by the American Petroleum Institute on Tuesday.
The build estimate pressured oil prices which were already wobbly after traders’ expectations of further Chinese stimulus got betrayed by the government in Beijing, which seems to believe current stimulus is enough.
Meanwhile, the EIA reported an inventory draw in gasoline and a fall in middle distillates for the week to October 4.
Gasoline stocks shed 6.3 million barrels in the period, with production averaging 10.2 million barrels daily.
This compared with a build of 1.1 million barrels for the previous week, when production averaged 9.6 million barrels daily.
In middle distillates, inventories fell by 3.1 million barrels in the week to October 4, with production averaging 5.0 million barrels daily.
This compared with an inventory draw of 1.3 million barrels and daily production averaging 4.8 million barrels.
Earlier in the week, the EIA issued an update on oil and gas, in which it cut oil demand expectations for both the United States and the world in 2025. The authority now expects global demand to add some 1.2 million bpd next year, which is down by 300,000 bpd from earlier EIA forecasts. U.S. demand, according to the EIA, was set to rise by 100,000 bpd less than previously expected, to 20.5 million barrels daily.
It’s worth noting, however, that the EIA has been projecting weaker oil demand for much of this year as well, only to reveal in September that factual data for May and July showed a surge to multi-year seasonal highs.
Oil prices, meanwhile remained relatively stable earlier in the day, as fears of an escalation in the Middle East gave way to hopes of a ceasefire between Israel and Hezbollah, with one analyst pointing out that geopolitical news has been distorting oil markets.
“The everyday dilemma of 'Middle Eastern headlines' moving like a pendulum between 'ceasefire talks' and 'further escalation in attacks' has been distracting investors from reality ... Oil markets are twirled in sentiments of 'buying the rumor' and sidelining the real fundamentals that should matter,” Piryanka Sachdeva from Phillip Nova told Reuters.
By Irina Slav for Oilprice.com
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