Crude oil prices faced pressure this morning following a report from the U.S. Energy Information Administration (EIA) showing an inventory increase of 2.1 million barrels for the week ending November 1.
This marked a shift from the previous week, which saw a smaller inventory draw of 500,000 barrels. The report from the American Petroleum Institute (API) earlier this week had also predicted a build in crude oil inventories for the same period.
At the time of writing, Brent crude was priced at $75.07 per barrel, and West Texas Intermediate (WTI) was at $71.70 per barrel, both lower than their opening prices. The market reaction came after Republican candidate Donald Trump won the U.S. presidential election.
The API’s report also highlighted estimated inventory declines in fuels for the week ending November 1, while the EIA reported inventory builds in gasoline and middle distillates.
For gasoline, the EIA estimated a 400,000-barrel inventory increase, with daily production averaging 9.7 million barrels. This contrasted with the previous week’s 2.7 million-barrel draw, with production at the same level.
In the case of middle distillates, the EIA reported an inventory build of 2.9 million barrels for the week ending November 1, with production at 5.1 million barrels per day. This compared to a 1-million-barrel inventory drop the prior week, when production averaged 4.9 million barrels daily.
The EIA also noted that imports stood at 6.2 million barrels per day, while refinery throughput averaged 16.3 million barrels per day. These numbers were slightly higher than the previous week’s import rate of 6 million barrels per day and refinery run rates of 16.1 million barrels per day.
Oil prices were weighed down by both the API’s inventory report and early election results showing Republican gains, which boosted the U.S. dollar and pressured oil prices further.
Geopolitical concerns added a counterbalancing effect. With Trump’s presidential win, tensions between the U.S. and Iran are expected to rise, potentially threatening oil supplies from the Middle East.
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