Oil Slips On Large US Inventory Build

Crude oil prices moved lower today, after the US Energy Information Administration reported an inventory increase in crude oil of 10.2 million barrels for the week to December 9.

This compared with a draw of 5.2 million barrels for the previous week and an estimated inventory build for last week, as reported by the American Petroleum Institute yesterday.

At 424.1 million barrels, US crude oil inventories are 6 percent below the seasonal average for the last five years, the EIA noted in its report.

In fuels, the EIA reported builds across the board.

Gasoline inventories added 4.5 million barrels in the week to December 9, with production during that week averaging 9.2 million bpd.

This compared with an inventory build of 5.3 million barrels for the previous week and production of 9.1 million bpd.

In middle distillates, the EIA estimated an inventory build of 1.4 million barrels for the week to December 9, with production averaging 5.2 million bpd.

This compared with an increase of 6.2 million barrels in middle distillate inventories in the prior week, with production averaging 5.3 million barrels daily.

Refineries in the US processed an average XXX million barrels of crude daily last week, which compared with 16.6 million bpd during the previous week.

Oil prices have been on the rise this week on the news that China is relaxing its Covid restrictions further. Mass mandatory testing has been canceled and so have smartphone apps for tracking the Covid status of the owners.

Earlier today, however, prices inched down following the build in US inventories reported by the API, since analysts had expected a decline. The unexpected report suggested request might be weaker than thought, which had its usual effect on prices.

There was also a certain amount of profit-taking among oil traders before Fed’s next meeting, due today, where it is expected to announce yet another rate hike.

At the time of writing, however, both Brent crude and WTI were trending higher, up by more than 1 percent from opening.

By Irina Slav for Oilprice.com

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