The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning showing that U.S. commercial crude inventories increased by 1.1 million barrels last week, maintaining a total U.S. commercial crude inventory of 417.1 million barrels. The commercial crude inventory remains about 2% lower than the five-year average for this time of year. The storage increase is the first in five weeks.
Tuesday evening, the American Petroleum Institute (API) reported that crude inventories increased by 529,000 barrels in the week ending September 13. For the same period, analysts expected crude inventories to fall by about 2.9 million barrels. Gasoline and diesel fuel inventories also rose, by 800,000 and 400,000 barrels, respectively.
The big issue in oil markets now is how quickly Saudi Arabian production will restart. Crude prices jumped nearly 20% on Monday as oil traders reacted to the weekend attack on Aramco’s Abqaiq and Khurais processing facilities. Prices pulled back by about 6% or so on Tuesday as estimates for a recovery were more hopeful of a quick return.
Credit Suisse analyst William Featherston commented in a new note:
Saudi oil output to fully recover by the end of September following attacks this past weekend. While the overall impact to physical oil markets is minimal, the attack is a stark reminder of how limited global spare capacity is, the vulnerability of critical oil infrastructure. Increased geopolitical risk premium is clearly being reflected in oil markets with spot prices down just ~6-7% yesterday despite little impact to supply/demand balances, while the 2023 futures curve is up ~2% since Friday.
The Saudis have been able to meet customer commitments out of approximately 180 million barrels of domestic stockpiles and several tens of millions of barrels stored in leased tanks at major customer sites in the Netherlands, Japan and Egypt
According to the Joint Organisations Data Initiative data, Saudi stockpiles can cover about 18 days of customer deliveries, according to Reuters industry analyst John Kemp. At their peak in 2015, Saudi stockpiles could cover nearly 33 days of forward demand.
U.S. domestic oil production was flat week over week at 12.4 million barrels a day. The nation’s Strategic Petroleum Reserve also remained flat at 644.8 million barrels.
Shortly after the EIA report was released, the price for West Texas Intermediate rose by $0.17 a barrel, but it remains down about 1.8% for the day at around $58.28 a barrel. Brent crude traded down about 1.2% in London at $63.79 a barrel.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
