Oil Prices Tumble As Crude Inventories Rise

Crude oil prices moved further down today after the Energy Information Administration reported a crude oil inventory build of 1.3 million barrels for the week to May 14.

This compared with an estimated oil inventory build of a modest 620,000 barrels for the period, as reported by the American Petroleum Institute.

It also compared with a draw of 400,000 barrels, as estimated by the Energy Information Administration a week earlier.

Analysts had expected an inventory build of 1.68 million barrels for the week to May 14.

In gasoline, the EIA reported an inventory decline of 2 million barrels for last week, which compared with a build of 400,000 barrels a week earlier. Gasoline production last week averaged 9.8 million bpd, which compared with 9.6 million bpd a week earlier.

In middle distillates, the authority estimated an inventory draw of 2.3 million barrels for last week. This compared with a stock decline of 1.7 million barrels for the previous week.

Middle distillate production averaged 4.6 million bpd last week, compared with 4.7 million bpd a week earlier.

Refineries operated at 86.3 percent of capacity last week, processing an average 15.1 million bpd of crude. This compared with 15 million bpd for the previous week.

This week, some refineries on the Gulf Coast have been experiencing weather-related trouble that has affected their processing rates. How severe the effect will be should become known in EIA’s next weekly petroleum status report.

Heavy rains and flooding are already pounding East Texas and Louisiana ahead of what forecasters from the Colorado State University expect will be a hurricane season with ‘above average” activity.

Crude oil prices plunged yesterday on news that the U.S.-Iranian talks on the nuclear deal were progressing, with Russia’s envoy Mikhail Ulyanov telling the BBC that "important news is likely to be released by tomorrow" and "the negotiations have made major progress". Later, Ulyanov clarified his statement, noting that it was too early for a breakthrough.

This did not have a major effect on prices, which, at the time of writing, were at $66.04 per barrel for Brent crude and $62.69 per barrel for West Texas Intermediate.