Large Crude Build Pushes Down Oil Prices

The American Petroleum Institute (API) on Tuesday reported another week of crude oil inventory builds. This time, the build is extra large, at 5.213 million barrels for the week ending October 8, as U.S. crude inventories sit 66 million barrels below beginning of the year levels.

Analyst expectations for the week were for a build of 140,000 barrels for the week.

In the previous week, the API reported a surprise build in oil inventories of 951,000 barrels, compared to the 300,000 barrel draw that analysts had predicted.

Oil prices were relatively flat on Wednesday in the runup to the data release, but WTI is still north of $80 per barrel, while Brent crude trades at more than $83. Both WTI and Brent were down .10% and .17%, respectively, at 3:30 p.m. EST.

At 3:35 p.m. EST, WTI was trading at $80.55—a more than $1 gain on the week. Brent crude was trading at $83.28.

Oil inventories in the United States have drawn down nearly 66 million barrels so far this year, according to API data. And they've drawn down roughly 9 million barrels since the start of 2020.

U.S. oil production for the week ending October 1—the last week for which there is data—rose 200,000 bpd to 11.3 million bpd and is now just 200,000 below pre-Hurricane Ida levels.

The API reported a draw in gasoline inventories of 4.575 million barrels for the week ending October 8—compared to the previous week's 3.682-million-barrel build.

Distillate stocks saw a decrease in inventories of 2.707 barrels for the week, compared to last week's 345,000-barrel increase.

Cushing inventories saw a draw this week, adding 2.275 million barrels to the total inventory, after last week's 1.999-million-barrel increase.

By Julianne Geiger for Oilprice.com