Crude oil prices went down today after the Energy Information Administration reported an estimated inventory build of 800,000 barrels for the week to September 6.
This compared with a draw of 6.9 million barrels for the previous week, which however failed to move prices in a positive direction as it got drowned by pessimism about demand.
On Tuesday, the American Petroleum Institute estimated oil inventories had shed 2.79 million barrels in the week to September 6.
In fuels, the EIA also estimated inventory builds for the week.
In gasoline, the authority reported an inventory build of 2.3 million barrels for the period, with production averaging 9.4 million barrels daily.
This compared with an inventory build of 800,000 barrels for the previous week, when production averaged 9.7 million barrels daily.
In middle distillates, the EIA estimated an inventory increase of 2.3 million barrels for the week to September 6, with production at an average of 5.2 million barrels daily.
This compared with a stock decline of a modest 400,000 barrels for the prior week, when production stood at an average 5.2 million barrels daily.
Pessimism about demand, meanwhile, strengthened earlier in the week, after OPEC revised its demand growth projection for the year for the second time in two months. The group now expects demand growth at 2.03 million barrels daily this year and 1.74 million bpd next year. That’s down from 2.11 million bpd and 1.78 million bpd, respectively, in OPEC’s monthly oil market report for August.
Earlier today, however, prices were on the mend, largely driven by expectations of disruptions in the Gulf of Mexico as tropical storm Francine strengthened to a hurricane, which forecasters expect to make landfall in Louisiana later in the day.
Already a quarter of oil production capacity has been shut down in the Gulf of Mexico, the Bureau of Safety and Environmental Enforcement said on Tuesday. There were also reports Exxon was going to slash production at its Baton Rouge refinery to just a fifth of capacity ahead of Francine’s landfall.
By Irina Slav for Oilprice.com
