Oil plunges after EIA reports building crude inventory

Crude oil prices briefly fell after the Energy Information Administration announced an increase in crude oil inventories of 2.1 million barrels for the week to July 16.

Last week’s inventory has been compared to a draw of 7.9 million barrels for the previous week and an estimated – and shocking – increase in crude inventories of 806,000 barrels, as reported on Tuesday by the American Petroleum Institute.

At the time of writing, Brent crude was trading at $ 71.53 per barrel and West Texas Intermediate at $ 69.51 per barrel, both up significantly from the opening despite the report of API negative inventory the day before in what could be interpreted as traders shaking a perhaps excessive panic from earlier week’s oil demand.

In gasoline, the authority estimated a decrease in stocks of 100,000 barrels for the week until July 16, against an increase of 1 million barrels reported for the previous week. Gasoline production fell last week, averaging just 9.1 million bpd, down from 9.9 million bpd the week before.

Demand for gasoline has rebounded strongly in the United States, pushing up prices at the pump. The national average per gallon of gasoline was $ 3.16 per gallon as of July 19, per GasBuddy.

At the same time, for middle distillates, the EIA reported a withdrawal of 1.3 million barrels for the week before July 16, against a build-up of 3.7 million barrels for the previous week.

Middle distillate production remained at 4.9 million bpd last week.

Oil prices have been particularly volatile this week, seeing one of the biggest single-day oil price declines on Monday, as fears mounting over the Delta variant and increased production from the OPEC + have altered the overall outlook for the industry.

By Irina Slav for Oil Octobers

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