Energy
Crude Oil Price Trimmed Following Inventory Increase of 2 Million Barrels
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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning. U.S. commercial crude inventories increased by 2.1 million barrels last week, maintaining a total U.S. commercial crude inventory of 504.1 million barrels. The commercial crude inventory remains near levels not seen at this time of year in at least the past 80 years.
Wednesday evening, the American Petroleum Institute (API) reported that crude inventories fell by 3.3 million barrels in the week ending February 12. For the same period, analysts had estimated an increase of 3.1 million barrels in crude inventories.
Total gasoline inventories increased by 3 million barrels last week, according to the EIA, and remain well above the upper limit of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged 8.9 million barrels a day for the past four weeks, up by 3% compared with the same period a year ago.
Benchmark West Texas Intermediate (WTI) crude prices have risen by about $5 barrel since last Friday, primarily on the strength of promises by Saudi Arabia, Russia, Venezuela and Qatar that they will not raise production above January levels. Iran has so far withheld a similar promise, but traders and investors remain hopeful.
Truth be told, Russia pumped an all-time high of about 10.9 million barrels a day in January, and Saudi Arabia was not far behind. None of the bunch said it planned to cut production. If, and that’s a big if, they all keep their promise, global production will still increase in 2016 by about 300,000 barrels a day, unless production is cut elsewhere.
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