U.S. Crude Slips On Supply Buildup, Fuel Stocks Rise Too
Zacks Investment Research | Aug 25, 2016 09:39PM ET
The U.S. Energy Department's weekly inventory release showed that crude stockpiles recorded a large build. Worryingly, supplies at the Cushing, OK storage hub rose, too. On a further bearish note, the report revealed that refined product inventories – gasoline and distillate – both increased from their previous week levels.
The downbeat sentiment on the back of increase in stocks across the board dragged down oil to around $47 a barrel.
Analysis of the EIA Data
Crude Oil: The federal government’s EIA report revealed that crude inventories increased by 2.50 million barrels for the week ending Aug 19, 2016, following a decline of 2.51 million barrels in the previous week.
The analysts surveyed by S&P Global Platts – the leading independent commodities and energy data provider – had expected crude stocks to go up some 200,000 barrels. A fall in refinery demand and higher imports led to the big stockpile build with the world's biggest oil consumer.
In particular, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – was up 375,000 barrels from previous week’s level to 64.91 million barrels.
Following the fourth inventory rise in five weeks, U.S. remains awash with excess oil. At 523.59 million barrels, current crude supplies are up 16% from the year-ago period and are at the highest level during this time of the year.
The crude supply cover was up marginally - from 31.2 days in the previous week to 31.3 days. In the year-ago period, the supply cover was 26.7 days.
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