Crude Oil inventories: +7.2M vs -0.8M exp. +2.8M prior
US production also hits new record of 12.2M bpd
Oil dips lower but selling seems short-lived
The weekly crude oil inventory release has shown a large build at the same time as US production has surged up to a new record high, but despite this the crude oil markets are holding up fairly well. A print of +7.2M for the latest headline inventory number is well above the -0.8M expected and marks a second consecutive rise after a reading of +2.8M last time out. The reading was also above last night’s API figure which showed a rise of 3.0M.
Although the latest inventory release showed a large build, the overall level is pretty much in line with the 5-year average. Source:XTB Macrobond
In addition to the headline reading the following components were also released at the same time:
Gasoline: -1.8M vs -2.5M exp
Distillates: -2.0M vs -0.6M exp
Refinery utilisation: -0.2% vs +1.0% exp
Production: 12.2M bpd vs 12.1M bpd prior
The standout from these is another rise in production which has made a new record high. Refinery utilisation unexpectedly dropped which could be seen as negative but on the other hand both the gasoline and distillate figures both failed to support the build seen in the headline. On balance this does seem to be a negative data point for the Oil markets, but after the initial selling there is yet to be any follow through to the downside.
Oil reacted negatively to the inventory release, with price falling around 40 ticks in the minute that followed. There has so far been a lack of follow through however with the low of 68.98 not breached since. Source: xStation
Longer term the outlook remains positive for Brent crude Oil with price still in breakout territory above 63.75. Source: xStation