United States crude oil stocks fall by 1.3 million barrels

Andrew Cummings
April 12, 2017

Crude oil prices turned positive on Tuesday, reversing course on reports that Saudi Arabia has told OPEC officials it wants to continue output cuts for an additional six months. Production had increased in February to 10.011 MMbpd as the country replenished its own storage tanks.

Despite the overarching sentiment that the American Petroleum Institute would report a build late Tuesday afternoon, WTI was trading up 0.36% at $53.27 at 1:20pm EST, while Brent Crude traded at $56.03, up.09% on the day. A weaker dollar also has helped support dollar-denominated commodities such as oil.

US crude stocks fell unexpectedly last week as imports declined and refinery runs rose, while gasoline and distillate inventories also drew, industry group the American Petroleum Institute said Tuesday. Analysts expect a slight uptick. Under the accord reached in December, Saudi Arabia pledged to cap its output at 10.058 MMbpd.


But Al-Falih said earlier that he wanted "conformity by all" in any extension as Saudi officials warned US shale producers that they shouldn't assume an extension will be automatic. That is partly because US oil producers took advantage of the rise in prices and raised their own output.

Gasoline prices are expected to average $2.39 per gallon this year, with gas averaging $2.46 per gallon during the peak April-through-September driving season vs. $2.23 per gallon last summer.

He also said the widening discount of the current Brent crude price to the contract in the next month is "basically telling you the market is not actually that tight".


The disconnect between the API's and EIA's data is significant, with the EIA reported only two draws over the last fourteen weeks, with a total build of 49.5 million in that timeframe.

The six secondary sources used by OPEC are the International Energy Agency, oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), consultancy Cambridge Energy Research Associates (CERA) and industry newsletter Petroleum Intelligence Weekly (PIW).


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