Crude oil prices fell slightly after the Energy Information Administration reported a moderate build in U.S. crude oil inventories for the week to March 22.
These added 2.8 million barrels in the period, the EIA said a day after the American Petroleum Institute reported a surprising build in inventories.
A week earlier, the EIA reported a draw of 9.6 million barrels, which livened up West Texas Intermediate on its way closer to the US$60-per-barrel mark, which it hit briefly earlier this week.
The authority said refineries last week processed 15.8 million barrels of crude daily, compared to 16.2 million bpd a week earlier.
Gasoline production averaged 9.7 million bpd last week, from 9.9 million bpd in the week before. Gasoline inventories fell by 2.9 million barrels, after a draw of 4.6 million barrels in the previous week.
Distillate fuel production averaged 4.9 million bpd last week, virtually unchanged on the week. Distillate fuel inventories fell by 2.1 million barrels.
This segment of the downstream industry could see more action in the months to come as refiners prepare to capture higher profit margins from increased sales of low-sulfur bunkering ahead of the IMO’s new emission rules that enter into effect next January.
Gasoline production, on the other hand, might swing into a glut as it grows faster than demand in the United States at least. This opens the door wider for exports as we approach driving season in the northern hemisphere.
As for crude oil fundamentals, optimism about a U.S.-China trade deal, the OPEC cuts, and the U.S. sanctions on Iran and Venezuela continue to dominate oil headlines, along with the persistent worry about the world’s economic growth prospects.
The tailwinds among these factors have helped to push crude oil benchmarks up 25 percent since the start of the year.
At the time of writing, Brent crude was trading at US$67.63 a barrel, with WTI at US$60.00 a barrel.