Futures in New York fell from the settlement Tuesday after the American Petroleum Institute was said to have reported crude inventories mounted higher by 5.66 million barrels last week. That would be the largest build since January if Energy Information Administration data confirms it on Wednesday in its release.
“That’s really bearish,” James Williams, president of London, Arkansas-based energy researcher WTRG Economics, said. If this size of a crude build “gets confirmed by the EIA, we’ll probably have a few days of lower crude prices.”
A Bloomberg survey showed crude storage in tanks and terminals across the country likely rose 3 million barrels last week.
Crude has closed above US$60 a barrel over the last two weeks as the Organization of Petroleum Exporting Countries and allied producers work to tighten global markets through supply cuts. While the US Energy Information Administration sees worldwide supplies accelerating this year and the next, with estimates for demand growth shrinking, Saudi Aramco Chief Executive Officer Amin Nasser said he isn’t losing any sleep over peak oil demand.
West Texas Intermediate for April traded at US62.32 a barrel at 4.38 pm after settling at US$62.60 a barrel on the New York Mercantile Exchange, the highest level in a week. Total volume traded was about 10% below the 100-day average.
Brent for May settlement added 25 cents to end the session at US$65.79 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark traded at a US$3.34 premium to May WTI.
The EIA also boosted its US crude output forecasts for 2018 and 2019, and said that production would top 11 million barrels a day in October — a month ahead of prior estimates.
The API report also reported that Cushing, Oklahoma supplies contracted by 790,000 barrels and gasoline supplies declined by 4.54 million barrels. Distillate inventories rose, the data showed. A decline in motor-fuel inventories would be the first since late January and drop in Cushing supplies would be for an 11th straight week, when compared with EIA data.
“People are waiting to see: Will storage volumes point toward a tighter fundamental outlook?” said Gene McGillian, a market research manager at Tradition Energy in Stamford, Connecticut. “It does appear as if we need more evidence that the rebalance continues to really ignite a rally again.”