Oil Dips After EIA Reports Crude Inventory Build

Crude oil prices briefly dipped after the Energy Information Administration reported a crude oil inventory build of 2.1 million barrels for the week to July 16.

Last week’s inventory build compared with 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 by the American Petroleum Institute on Tuesday.

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

In gasoline, the authority estimated a stock decrease of 100,000 barrels for the week to July 16, which compared with a build of 1 million barrels reported for the previous week. Production of gasoline last week fell, averaging just 9.1 million bpd, which compared with 9.9 million bpd for the previous week.

Gasoline demand has been on a strong rebound in the United States, sending prices at the pump higher. The national average per gallon of gasoline was $3.16 per gallon as of July 19, per GasBuddy.

For middle distillates, meanwhile, the EIA reported an inventory draw of 1.3 million barrels for the week to July 16. This compared with an inventory build of 3.7 million barrels for the previous week.

Middle distillate production stayed at 4.9 million bpd last week.

Oil prices have been particularly volatile this week, seeing one of the largest single-day oil price drops ever on Monday as growing fears about the Delta variant and OPEC+ production increases sour the overall industry outlook.