Crude Oil Build Up is smaller than Expected

The American Petroleum Institute (API) announced a 620,000 barrel increase in Crude Oil inventories for the week ending May 14. For the week, analysts expected a build of 1.680 million barrels. The API announced a massive draw in oil inventories of 2.533 million barrels last week, compared to analysts’ expectations of 2.817 million barrels.

According to API info, Crude Oil inventories have increased by more than 50 million barrels since the start of 2020. Oil prices fell the day before the data was published. The market was incredibly jittery after it was suggested that “important news” about the Iranian nuclear agreement would be released on Wednesday, the resolution of which might result in more Iranian oil barrels entering the market.

Later, Russia’s envoy to the JCPOA talks, Mikhail Ulyanov, clarified the situation, saying it was already “too early for a breakthrough.” Even the prospect of more Iranian oil reaching the market caused oil prices to plummet. Though Crude Oil inventories fell this week, the Energy Information Administration reported that US oil output increased by 100,000 BPD to 11 million BPD on average for the week ending May 7.

For the week ending May 14, the API registered a 2.837 million barrel draw in gasoline inventories, partially offsetting the previous week’s 5.640-million-barrel build. Analysts had predicted a weekly draw of 886,000 barrels. After an 872,000-barrel drop last week, distillate inventories fell by 2.581 million barrels this week. Cushing inventories increased by 53,000 barrels this week.At 4:41 p.m. EDT, the WTI benchmark was trading at $65.43 per barrel. On the other hand, Brent crude was trading at $68.65 per barrel, both of which were flat on the week.