Very Large Product Builds Push Oil Lower Despite Crude Draw
Very Large Product Builds Push Oil Lower Despite Crude Draw | OilPrice.com
Crude oil prices moved lower today after the Energy Information Administration reported substantial fuel inventory builds for the week to December 29.
In crude oil, the authority estimated an inventory decline of 5.5 million barrels for the last week of 2023.
This compared with a weekly inventory draw of 6.9 million barrels for the previous week, when fuel inventories posted mixed inventory changes with gasoline stocks falling and middle distillate inventories swelling.
A day before the EIA released its report, the American Petroleum Institute reported an estimated 7.4-million-barrel draw in crude oil inventories, accompanied by sizeable inventory builds in gasoline and middle distillates, both of over 6 million barrels.
For the final week of 2023, the EIA estimated a gasoline inventory build of 10.9 million barrels, which compared with a decline of 600,000 barrels for the previous week.
Gasoline production averaged 8.8 million barrels daily last week, which compared with 10 million barrels daily.
In middle distillates, the EIA reported an estimated inventory increase of 10.1 million barrels for the week to December 29, which compared with a build of 800,000 barrels for the previous week.
Middle distillate production averaged 5.1 million barrels daily in the final week of December, which compared with 5.1 million bpd for the previous week.
Oil prices meanwhile have been creeping up amid an outage at Libya’s largest producing field, Sharara and heightened tensions in the Middle East. The Sharara field has been blocked by protests while the latest in the Middle East is another attack by Yemen’s Houthis on a cargo ship in the Red Sea.
Following these developments, Brent crude moved closer to $80 per barrel earlier today while West Texas Intermediate ticked up higher above $70 per barrel.
Goldman Sachs said this week it expected Brent to trade in the range between $70 and $90 per barrel this year thanks to stable OPEC supply. The bank’s analysts added geopolitical factors remained a major risk for prices.
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By Irina Slav for Oilprice.com
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