Oil prices under pressure as gasoline inventories rise

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The American Petroleum Institute (API) on Tuesday reported a drop in crude oil inventories of 831,000 barrels for the week ending Sept. 25 – but that drop was more than offset by an increase in gasoline inventories.

Analysts had predicted an inventory drawdown of 2.325 million barrels.

During the previous week, API reported a slight increase in crude oil inventories of 691,000 barrels, after analysts predicted a drawdown of 2.256 million barrels.

Oil prices fell sharply on Tuesday afternoon ahead of the release of API data as the market continues to be frightened by the growing number of coronavirus cases around the world – a factor that could cause movements to decrease. and industrial activity around the world, and ultimately, declining demand for oil.

In the hours leading up to Tuesday’s data release at 12:44 a.m. EDT, WTI had fallen $ 2.00 (-4.93%) to $ 38.60, down $ 1 a barrel on the week. The benchmark Brent index fell by $ 1.82 (-4.29%) to $ 40.61.

Oil production in the United States has fallen over the past week, and it is still down significantly from the peak of 13.1 million bpd on March 13. US oil production currently sits at 10.7 million b / d, according to the Energy Information Administration – 2.4 million b / d below those March highs.

Related: Russia Calls for Global Response to Oil Demand Crisis

The API reported an increase in gasoline inventories of 1.623 million barrels of gasoline for the week ending Sept. 25 – from the 7.735 million barrels draw of the previous week. Analysts were expecting a much smaller drawdown of 648,000 barrels for the week.

Distillate inventories were down 3.424 million barrels for the week, compared to last week’s 2.104 million barrels draft, while Cushing’s inventories were up 1.610 million barrels.

At 4:36 p.m. EDT, the benchmark WTI was trading at $ 38.99 while Brent crude was trading at $ 40.76.

By Julianne Geiger for OilUSD

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