Crude Oil Price Wobbles on Another Big Increase in Gasoline Stockpiles

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories increased by 2.8 million barrels last week, maintaining a total U.S. commercial crude inventory of 488.3 million barrels. The commercial crude inventory rose above the upper limit of the average range for this time of year.

Tuesday evening, the American Petroleum Institute (API) reported that crude inventories rose by 2.9 million barrels in the week ending January 20. API also reported gasoline supplies increased by 4.8 million barrels and distillate inventories increased by 2 million barrels. For the same period, analysts had estimated an increase of 2.8 million barrels in crude inventories, a rise of 498,000 barrels in gasoline stockpiles and a decrease of 970,000 barrels in distillates.

Total gasoline inventories increased by 6.8 million barrels last week, according to the EIA, and remain above the upper limit of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged about 8.3 million barrels a day for the past four weeks, down by 4.7% compared with the same period a year ago.

Analysts at energy research firm ESAI Energy on Monday released a note claiming that the International Energy Agency (IEA) estimate of 2016 oil product demand growth of 1.5 million barrels a day is 300,000 barrels too high. That’s 20% less and a difference that big could have an impact on demand growth in 2017 and on how much crude oil has to be taken out of production by OPEC and its partners in order to rebalance the market.
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