LONDON (ICIS)--After trading at their highest level since mid-2015 only two days ago, Brent and WTI futures retreated on Wednesday, taking stock of a surprise build-up in US crude inventories.
Data from the Energy Information Administration (EIA), published at 15:30 London time, showed that US crude stocks had increased by 2.24m barrels in the week to 3 November. While this nearly perfectly offset the previous week’s drawdown, the unexpected rise also defeated analysts’ expectations for a 2.9m barrel decrease.
The dent to gasoline stocks, however, was significant, with a decrease of 3.3m barrels against a forecast for a 1.9m barrel draw. Distillate inventories were also trimmed by about 3.4m barrels, well in excess of expectations for a 1.4m barrel draw.
The EIA data also showed a 290,000 barrels per day increase in US refinery crude runs, to 16.31m barrels per day in total. Meanwhile, refinery utilisation rates were also up by 1.5 percentage points, to 89.6%.
Prices dipped in disappointment over the crude inventory build-up, sending markets a shot at point blank. Prices have so far edged up not only on increased tensions in the Middle East, but also on the broader conviction that OPEC efforts had eventually started to mop up the global oil glut.
Before the data was reported, at 15:15 London time, January Brent was trading at $63.24/bbl, down 45 cents/bbl, while December WTI was trading at $56.87/bbl, down 33 cents/bbl.
After the data was reported, at 14:45 London time, January Brent was at $63.12/bbl, down 57 cents/bbl, while December WTI was trading at $56.58/bbl, up 62 cents/bbl.