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Large Rise in Crude Inventories Puts a Ceiling on Oil Prices

by Krystal

The American Petroleum Institute (API) reported a significant increase in U.S. crude oil inventories, which rose by 9.043 million barrels during the week ending January 31. This surge was far above analysts’ expectations of a 2.8-million-barrel increase.

This follows a 5.025 million barrel rise in crude oil inventories the previous week, with gasoline inventories also showing growth over several weeks.

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Earlier this week, the Department of Energy (DoE) announced a slight increase of 0.2 million barrels in the Strategic Petroleum Reserve (SPR) as of February 7. The SPR now holds 395.3 million barrels, which is still significantly lower than pre-withdrawal levels under the Biden administration.

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As of 4:09 p.m. ET, Brent crude was trading at $76.92, up by $1.05 (+1.38%) for the day, and $0.92 higher than the previous week. U.S. benchmark WTI also saw a rise, gaining $0.91 (+1.26%) to reach $73.23, marking an increase of roughly $0.60 from last week.

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Meanwhile, gasoline inventories declined by 2.507 million barrels during the week ending January 31, partially offsetting a larger 5.426-million-barrel increase the previous week. Gasoline stocks are now slightly above the five-year average for this time of year, according to the latest data from the EIA.

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Distillate inventories continued their decline, falling by 590,000 barrels in the most recent week. This follows a much larger drop of 6.979 million barrels the week before. As of January 31, distillate inventories were approximately 12% below the five-year average.

In Cushing, Oklahoma—the critical delivery point for U.S. crude futures—inventory levels rose by 407,000 barrels, according to API data. This follows a smaller increase of 110,000 barrels the previous week.

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