Crude oil prices ticked lower today after the Energy Information Administration reported an inventory build of 4 million barrels for the week to September 8.
This compared with a draw of 6.3 million barrels for the previous week, which in turn followed another massive inventory decline of 10.6 million barrels for the week before that.
Those large draws were made during peak demand season and there is a chance that now inventory draws may moderate or possibly even reverse as demand declines seasonally.
In fuels, meanwhile, the EIA estimated a gasoline build and a middle distillate increase in stocks.
In gasoline, the EIA reported an inventory increase of 5.6 million barrels for the week to September 8, with production averaging 9.2 million barrels daily.
This compared with a draw of 2.7 million barrels for the previous week and a daily production rate of 9.8 million barrels.
In middle distillates, the EIA estimated an inventory build of 3.9 million barrels for the week to September 8, with production at 5 million bpd.
This compared with a modest inventory build of some 700,000 barrels for the previous week, with production averaging 5 million barrels daily as well, unchanged from the week before.
Oil prices meanwhile have hit the highest in 10 months as traders focus on supply for a change, with concern about a potential slowdown in demand in some large consumers taking the back seat.
In addition to the latest production control announcements from Russia and Saudi Arabia, a shutdown of oil terminals in Libya amid a storm has contributed to a perception of tighter supply.
Prices continued higher earlier today, too, despite the American Petroleum Institute’s inventory report, which showed an unexpected build in crude oil, to the tune of 1.17 million barrels, for the week to September 8.
"Bullish demand outlook by the OPEC and the U.S. Energy Information Administration's (EIA) prediction of a decline in global oil inventories reinforced market views of tightening supply going forward," Rakuten Securities analyst Satoru Yoshida told Reuters.
OPEC, meanwhile, forecast a shortage of 3.3 million barrels daily for the final quarter of the year, prompting ING’s head of commodity strategy to comment that “These numbers will cause some to question OPEC’s claims that their main objective is to keep the market balanced as their own numbers clearly do not show this.”
By Irina Slav for Oilprice.com
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