As investment banks become increasingly bullish on crude oil, the Energy Information Administration reported a 6.8-million-barrel build in U.S. crude oil inventories for the week ending January 26. The report comes a day after the American Petroleum Institute surprised markets once again with an estimated build of 3.23 million barrels.
Analysts had expected the EIA to report a draw of 1.6 million barrels, in keeping with a string of tenth consecutive weekly draws.
Gasoline stockpiles, according to the EIA, fell by 2 million barrels, from a build of 3.1 million barrels for the previous week. Gasoline production last week averaged 9.6 million barrels, versus 9.7 million bpd in the week before. Refineries processed an average 16 million bpd of crude last week, compared with 16.5 million bpd a week earlier.
With refinery maintenance season approaching, some analysts are starting to warn we will begin to see inventory builds and this could hurt prices for a while.
Meanwhile, earlier this week the EIA took the trouble to defend its weekly numbers, which some industry watchers have shunned as lacking credibility. The weekly inventory and, more importantly, production numbers—which have strong market-moving potential—are taken by extrapolation from the EIA’s Short-Term Energy Outlook, the authority explained.