In today’s market developments, crude oil prices experienced a decline, prompted by the U.S. Energy Information Administration‘s revelation of a substantial 4.2 million barrel inventory increase for the week ending February 23. This contrasts with the previous week’s build of 3.5 million barrels, accompanied by reductions in gasoline and middle distillates.
For the week ending February 23, the EIA reported a gasoline inventory draw of 2.8 million barrels, with a weekly production average of 9.4 million barrels per day (bpd). Comparatively, the prior week saw a 300,000-barrel inventory decline, with a daily production average of 9 million barrels.
In the middle distillates category, the authority noted a 500,000-barrel inventory decline for the week ending February 23, with a daily production average of 4.3 million barrels. In contrast, the preceding week witnessed a 4 million-barrel inventory draw, alongside a daily production average of 4.2 million bpd.
Simultaneously, oil prices saw an uptick on Tuesday, driven by reports suggesting that OPEC+ intends to extend its production cuts until the year’s end. While an anticipated move, this decision could provide support for prices.
Collectively, OPEC+ members agreed to reduce production by 2.2 million bpd in the current quarter. It is noteworthy that a significant portion of this reduction was already in effect, including Saudi Arabia’s voluntary cut of 1 million bpd initiated in mid-2023.
However, on the same day, the American Petroleum Institute (API) released data indicating an unexpected oil inventory build for the week ending February 23, counteracting OPEC+ cut expectations. Contrary to projections for an inventory draw, the API reported a substantial addition of 8.43 million barrels.
As of the latest update, Brent crude is trading at $84.15 per barrel, and West Texas Intermediate is priced at $79.31 per barrel—both experiencing an increase from their opening values. While prices initially trended higher, the forthcoming EIA report is anticipated to influence market direction, given the heightened sensitivity to U.S. crude oil inventory updates.