U.S. Energy Information Administration (EIA) on Wednesday reported builds in U.S. crude oil and gasoline inventories in last week, and two major benchmarks of crude oil moved downward following the report.
West Texas Intermediate (WTI) and Brent for November delivery prices settled 1.0 and 0.76 percent lower, respectively. On Wednesday, the settlement prices for WTI and Brent for November delivery prices were 71.57 and 81.34 U.S. dollars, respectively.
According to the Weekly Petroleum Status Report by EIA, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), increased 1.9 million barrels during the week ending Sept. 21.
This was the first build in the U.S. commercial crude oil inventories after six weeks. Lower crude oil input to refineries due to seasonal maintenance was the main reason behind the increase.
In the previous week ending Sept. 14, EIA reported a draw of 2.06 million barrels in the U.S. crude oil inventories. The commercial crude oil inventories excluding SPR was 15.9 percent below the levels of the same week last year.
U.S. crude oil refinery inputs averaged 16.51 million barrels per day last week, which was 901,000 barrels per day lower than the previous week's average. Over the past four weeks, refinery inputs averaged 17.36 million barrels per day, which was 15.9 percent higher than the same four-week period of last year.
The big increase in crude oil inputs to refineries from the same period of last year was due to the fact that Hurricane Harvey hit the Gulf coast a year ago and caused major disruptions in the refinery activities.
Refinery utilization is coming down as the high demand season is over and the refineries start their seasonal maintenance projects.
U.S. total motor gasoline inventories increased by 1.5 million barrels last week, about 8.5 percent above the levels of the same week last year. Distillate fuel inventories decreased by 2.2 million barrels last week, 0.1 percent below the levels of the same week last year. Total commercial petroleum inventories increased by 4.5 million barrels last week.
According to EIA, U.S. total products supplied over the last four-week period averaged 20.84 million barrels per day, up by 2.6 percent from the same period last year. Over the past four weeks, motor gasoline supplied averaged 9.48 million barrels per day, up by 0.4 percent from the same period last year.
Distillate fuel oil supplied over the last four-week period averaged 4.0 million barrels per day, down by 0.7 percent from the same period last year. Jet fuel supplied averaged 1.74 million barrels per day, up by 4.0 percent from the same period last year.
Meanwhile, EIA reported that estimated weekly U.S. crude oil production went up by 100,000 to 11.1 million barrels per day.
U.S. crude oil imports averaged 7.8 million barrels per day last week, 222,000 barrels per day lower than the levels of the previous week. Over the past four weeks, crude oil imports averaged 7.78 million barrels per day, 9.8 percent higher than the same four-week period last year.
U.S. crude oil exports averaged 2.64 million barrels per day last week, up by 273,000 barrels per day from the previous week.
Oil prices moved downward on Wednesday after official data showed builds in U.S crude oil and gasoline inventories and an increase in the U.S. weekly crude oil production estimates. Despite a significant draw in distillates, the market saw the EIA's report as a bearish factor.
Some analysts think that the market overreacted after OPEC informed last weekend that there would not be immediate supply increase due to declining Iranian oil exports before the sanctions enter into effect. So, they attributed the downward move as a correction.
On Wednesday, the price differential between the November delivery of Brent and WTI settled at 9.77 dollars. The U.S. crude oil exports have been increasing in recent months. The current price differential encourages oil traders to take advantage of some arbitrage opportunities.
