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Oil reverses after API reports inventory build across the board

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The American Petroleum Institute (API) reported on Tuesday a build in crude oil inventories of 1.973 million barrels for the week ending December 11.

Analysts had predicted an inventory draw of 1.937 million barrels for the week.

In the previous week, the API reported a build in oil inventories of 1.141-million barrels, after analysts had predicted a draw instead, of 1.514 million barrels.

Both Brent and WTI were up on Tuesday afternoon before the data release, despite OPEC’s MOMR on Monday that showed the group’s oil production had risen for November while adjusting downward its forecast for oil demand. Oil prices also remain high despite signs that more—and stricter—lockdowns are likely.

Vaccine optimism and the first vaccine doses given this week is what appears to remain the prime ruler of today’s oil market.

In the run-up to Tuesday’s data release, at 3:28 p.m. EDT, WTI had fallen by $0.57 (+1.21%) to $47.56, up nearly $2 per barrel on the week. The Brent crude benchmark had risen on the day $0.42 at that time (+0.84%) to $50.71—also up nearly $2 per barrel on the week.

U.S. oil production was steady at 11.1 million  bpd for the week ending December 4, according to the Energy Information Administration—2.0 million bpd lower than the all-time high of 13.1 million bpd reached in March.

The API reported a small build in gasoline inventories of 828,000 barrels of gasoline for the week ending December 11—compared to the previous week’s 6.442-million-barrel build. Analysts had expected a 1.614-million barrel  build for the week.

Distillate inventories were up by 4.762 million barrels for the week, compared to last week’s 2.316-million-barrel increase, while Cushing inventories fell tis week by 165,000 barrels.

At 4:40 p.m. EDT, the WTI benchmark was trading at $47.52, while Brent crude was trading at $50.68.

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