Oil Falls After EIA Confirms Small Crude Inventory Build

On November 21, 2024, 4:39 AM

Crude oil prices dipped today after the U.S. Energy Information Administration reported an inventory build of 500,000 barrels for the week to November 15.

At the time of writing, Brent crude was trading at $73.26 per barrel, with WTI at $69.50 per barrel.

The change compared with a build of 2.1 million barrels for the previous week, and another one, of 4.75 million barrels, estimated by the American Petroleum Institute for the week to November 15. Both last week’s EIA report and this week’s API report saw declines in fuel inventories, however.

For the week to November 15, the EIA estimated a gasoline inventory build of 2.1 million barrels, with production at 9.3 million barrels daily. These numbers compared with an inventory draw of 4.4 million barrels for the previous week, when production averaged 10.3 million barrels daily.

In middle distillates, the EIA estimated an inventory decline of 100,000 barrels for the week to November 15, with production averaging 4.8 million barrels daily. This compared with a stock decline of 1.4 million barrels and production of 5 million barrels daily for the previous week.

Oil prices, meanwhile, remained locked between the potential for further, potentially devastating, escalation between Russia and the Ukraine, and the latest API report that estimated the substantial crude oil inventory build.

Separately, there seem to be signs of improving Chinese demand for crude oil, which is adding to the war premium. Yet that premium is nowhere near as solid as it was two years ago when even the remote suggestion of a disruption in Russian oil exports led to a surge in crude oil prices.

The reason for that muted reaction is the perception of a well-supplied market coming from various forecasters, chief among them the International Energy Agency. Yet it was the IEA again that suggested this week the market may not be as well supplied as assumed. The agency’s global inventory estimate for the final quarter of the year appears to be wide off the mark, based on preliminary figures. The estimate was for a decline of a bit over 300,000 bpd. Instead, the actual decline seems likely to exceed 1.1 million bpd.