Oil Moves Lower after EIA Confirms Large Crude Build
Crude oil prices inched lower today after the Energy Information Administration reported an estimated inventory build of 7.9 million barrels for the week to June 9.
This compared with a modest inventory draw of half a million barrels for the previous week and an estimated build of just over 1 million barrels for the week to June 9 as reported on Tuesday by the American Petroleum Institute.
Analyst expectations for the weekly change ranged from a draw of 2.5 million barrels to a build of 2 million barrels.
In fuels, inventory changes were also positive the week to June 9.
In gasoline, the EIA estimated an inventory increase of 2.1 million barrels for the period, with production averaging 10.2 million barrels daily.
This compared with an inventory build of 2.7 million barrels for the previous week, when production stood at an average of 10.1 million barrels daily.
In middle distillates, the EIA reported an inventory build of 2.1 million barrels for the week to June 9, with production averaging 5 million barrels daily.
This compared with an inventory rise of 5.1 million barrels for the previous week, when production was at an average of 5.2 million barrels.
Meanwhile, prices have been on the mend after consumer price inflation fell to 4% in May on an annual basis and by a modest 0.1% on a monthly basis, sparking hope that the worst of the price rises may be over, stimulating higher energy demand.
Today, oil started trade relatively stable as traders awaited the conclusion of the Fed’s latest meeting. Expectations appear to be dominated by a pause in rate hikes, which should have a positive effect on oil benchmarks.
“It seems that the short-term hot monies (speculators) are hesitant to bid prices higher due to impending key data and events such as China’s industrial production, retail sales, and the housing price index for May due tomorrow, as well as today FOMC’s latest dot-plot projections,” an OANDA analyst told Reuters.
