Crude prices turned lower on Wednesday after coming under renewed selling pressure in the wake of data showing U.S. oil production topped the 10 million barrels per day (bpd) mark last week.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil production rose 3.3% to an all-time high of 10.25 million bpd, close to the output of top producers Russia and Saudi Arabia.
The report also showed that crude oil inventories rose by 1.9 million barrels in the week ended Feb. 2. That compared with analysts' expectations for a gain of 3.1 million barrels, while the American Petroleum Institute late Tuesday reported a supply-drop of 1.1 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 711,000 barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 420.3 million barrels as of last week, which the EIA considered to be in the middle of the average range for this time of year.
Meanwhile, gasoline inventories increased by 3.4 million barrels, compared to expectations for a gain of 0.4 million barrels. For distillate inventories including diesel, the EIA reported a gain of 3.9 million barrels.
Crude Oil Storage Report - Feb 7
Crude Oil Storage Report - Feb 7
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Crude Oil Storage Report - Feb 7
Comments below are from Raymond James:
This week's petroleum inventories update was bearish relative to consensus estimates for inventory changes. ''Big Three'' inventories (crude - including SPR, gasoline, distillates) rose by 9.7 MMBbls, higher than consensus estimates calling for a build of 2.4 MMBbls, and the seasonal norm of a build of 5.4 MMBbls. Total crude inventories rose by 2.4 MMBbls, versus consensus calling for a build of 3.2 MMBbls - with commercial crude rising 1.9 MMBbls and the SPR up 0.5 MMBbls. Cushing crude inventories fell once again, by 0.7 MMBbls, while Gulf Coast inventories rose significantly once again (up by 4.8 MMBbls).
Gasoline and distillates each posted larger than expected builds: 3.4 MMBbls and 3.9 MMBbls, respectively, relative to consensus calling for a gasoline build of 0.5 MMBbls and a distillate draw of 1.3 MMBbls. Total petroleum inventories were up 4.4 MMBbls.
Refinery utilization jumped up to 92.5% from 88.1% last week. Total petroleum imports were 10.2 MMBbls per day, down from last week's 11.2 MMBbls per day. Total petroleum product demand decreased 0.8% after last week's increase of 1.8%. On a four-week moving average basis, there is a 4.8% y/y increase in total demand. Lower 48 production is estimated at 9,727 MBbls per day, up 315 MBbls per day from last week, and 1,267 MBbls per day above year-ago levels. As always, weekly demand and supply figures are provisional estimates subject to frequent revisions.
This week's petroleum inventories update was bearish relative to consensus estimates for inventory changes. ''Big Three'' inventories (crude - including SPR, gasoline, distillates) rose by 9.7 MMBbls, higher than consensus estimates calling for a build of 2.4 MMBbls, and the seasonal norm of a build of 5.4 MMBbls. Total crude inventories rose by 2.4 MMBbls, versus consensus calling for a build of 3.2 MMBbls - with commercial crude rising 1.9 MMBbls and the SPR up 0.5 MMBbls. Cushing crude inventories fell once again, by 0.7 MMBbls, while Gulf Coast inventories rose significantly once again (up by 4.8 MMBbls).
Gasoline and distillates each posted larger than expected builds: 3.4 MMBbls and 3.9 MMBbls, respectively, relative to consensus calling for a gasoline build of 0.5 MMBbls and a distillate draw of 1.3 MMBbls. Total petroleum inventories were up 4.4 MMBbls.
Refinery utilization jumped up to 92.5% from 88.1% last week. Total petroleum imports were 10.2 MMBbls per day, down from last week's 11.2 MMBbls per day. Total petroleum product demand decreased 0.8% after last week's increase of 1.8%. On a four-week moving average basis, there is a 4.8% y/y increase in total demand. Lower 48 production is estimated at 9,727 MBbls per day, up 315 MBbls per day from last week, and 1,267 MBbls per day above year-ago levels. As always, weekly demand and supply figures are provisional estimates subject to frequent revisions.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group