Oil prices slipped Thursday morning, following an increase in US crude inventories and production. Brent crude <LCOc1> was trading at $58.24/bbl as of 9:20 AM UKT, down by 20 cents from the previous settlement. Meanwhile, WTI <CLc1> lost 17 cents from the settle, standing at $52.01/bbl at the same time.
According to the latest EIA data, US commercial crude inventories rose by 856,000 barrels to 457.3 million barrels (mmbbl) for the week ending October 20th, in sharp contrast to analysts’ estimations in a Reuters poll for a 2.6 mmbbl drop. Last week’s build in crude stocks was driven by higher crude imports and a rebound in crude production, following disruptions due to Hurricane Nate. The data showed that US crude output recovered to 9.5 million bpd last week, up by 1.1 million bpd from the prior week. Meanwhile, crude imports were up 640,000 bpd w-o-w, to 8.1 million bpd, the highest weekly volume since August.
After four consecutive weeks of increases, gasoline stocks fell by 5.5 mmbbl last week, sharply exceeding analysts’ expectations for a 17,000 bbl drop. Similarly, distillate stocks, which include diesel and heating oil, declined by 5.2 mmbbl, versus expectations for an 860,000 bbl drop, driven by increased heating oil demand ahead of winter months. Meanwhile, refinery crude runs increased by 586,000 bpd, while utilisation rates rose by 3.3% to 87.8% of total capacity.
The Oil Research Team
Supply Chain & Commodities Research