Oil Bulls Balk At Surprise Crude Oil Inventory Build

The American Petroleum Institute (API) estimated that crude oil inventories in the United States rose by 4.287 million barrels in the week ending May 9—a shock after analysts had estimated a 2.4-million-barrel draw. The API reported a 4.49 million barrel inventory decrease in the prior week.

So far this year, crude oil inventories are up more than 23 million barrels, according to Oilprice calculations of API data.

Earlier this week, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) climbed 500,000 barrels to 399.6 million barrels in the week ending May 9. Inventory levels in the SPR are hundreds of millions shy of the levels in inventory prior to the SPR withdrawal that took place under the Biden Administration.

At 3:35 pm ET, Brent crude was trading up $1.65 (+2.54%) on the day, landing at $66.61—a $4.50 per barrel recovery from this time last week.

WTI was also trading up on the day, by $1.79 (+2.89%) at $63.74—a $3.70 per barrel increase over last week’s level.

Gasoline inventories fell in the week ending May 9, by 1.374 million barrels, after falling by 1.97 million barrels in the week prior. As of last week, gasoline inventories were already 3% below the five-year average for this time of year, according to the latest EIA data.

Distillate inventories were also down this week, by 3.675 million barrels. In the week prior, distillate inventories had risen by 2.24 million barrels. Distillate inventories were already about 13% below the five-year average as of the week ending May 2, the latest EIA data shows.

Cushing inventories—the benchmark crude stored and traded at the key delivery point for U.S. futures contracts in Cushing, Oklahoma—fell by 850,000 barrels, the API data showed, on top of last week’s 854,000 barrel dip.

By Julianne Geiger for Oilprice.com

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