Oil Prices Dip as US Fuel Stocks Balloon Even Amid Crude Draw
Investing.com
Published Jan 13, 2021 10:23AM ET
Updated Jan 13, 2021 04:57PM ET
By Barani Krishnan
Investing.com - Oil prices fell a notch on Wednesday after U.S. government data showed another outsized weekly build in fuel products which was offset, however, by a slide in crude inventories.
New York-traded West Texas Intermediate, the key indicator for U.S. crude, settled at $52.91 per barrel, down 30 cents.
London-traded Brent, the global benchmark for crude, slid 52 cents to $56.06.
Gasoline stockpiles rose 4.395 million barrels during the first week of January, compared with expectations for a 2.69 million-barrel build, the Energy Information Administration said.
Stockpiles of distillates, which include diesel and heating oil, rose by a more-than-expected 4.786 million barrels against expectations for a 2.67 million-barrel increase, the EIA data showed.
Crude inventories, meanwhile, fell 3.247 million barrels last week, compared with analysts' expectations for a 2.26 million-barrel draw.
A study of the EIA numbers suggested that the crude draw was probably an extension of the tax-related de-stocking of crude barrels typically seen at the end of each. This tied in well with the higher refinery utilization rate seen for the just-ended week.
The slide in crude stocks also came as U.S.m exports of the commodity held steady at above 3 million barrels per day last week, versus the near record shipment of 3.6 million bpd in the previous week.
Yet, with fuel products remaining the weakest link of the oil complex, questions naturally abound on how long crude at above $50 per barrel could be defended.
Case in point: Even OPEC’s Secretary General Mohammed Barkindo noted on Wednesday that global crude stockpiles were “stubbornly high”, highlighting that inventories in the OECD group of advanced countries were over 160 million barrels and above five-year averages.
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