Crude Inventories Increased By 5.8 Million Barrels, Exceeding Analyst Expectations

On April 10, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories increased by 5.8 million barrels from the previous week, compared to analyst consensus of +2.37 million barrels. At current levels, crude inventories are about 2% below the five-year average for this time of the year.

Total motor gasoline inventories grew by 0.7 million barrels from the previous week, while analysts expected that they would decline by 1.32 million barrels. Distillate fuel inventories increased by 1.7 million barrels.

Crude oil imports averaged 6.4 million bpd, declining by 183,000 bpd from the previous week. Crude oil imports were slighly lower than the four-week average of 6.5 million bpd.

Strategic Petroleum Reserve increased from 363.8 million to 364.2 million as U.S. continued to buy oil for strategic reserves.

Domestic oil production remained unchanged at 13.1 million bpd despite high oil prices. At this point, it looks that WTI oil must settle above the $90.00 level to boost domestic oil production.

WTI oil settled in the $85.00 – $85.50 range as traders reacted to the EIA report. Crude inventories exceeded analyst expectations, which is bearish for oil markets. However, domestic oil production does not grow despite rising oil prices, which is a bullish factor for oil.

Brent oil moved closer to the $90.00 level as traders focused on rising crude inventories. It should be noted that oil is trading with a geopolitical premium, but serious risks for oil supply routes have not materialized yet.

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