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As crude oil inventories increase and product demand decreases, oil prices rise

by Patria

The American Petroleum Institute (API) reported a build of 1.586 million barrels in U.S. crude oil inventories, compared to last week’s large draw of 5.25 million barrels.

Analysts were expecting a draw of 1.650 million barrels for the week. The total number of barrels of crude oil moved so far this year is – 4 million, according to API data, and there has been a net draw in crude oil inventories of more than 51 million barrels since April.

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On Monday, the Department of Energy (DOE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 300,000 bbl last week, with SPR stockpiles remaining at a nearly four-decade low of 351.5 million bbl.

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Oil prices were trading higher on Tuesday ahead of the API data release, with Brent trading up 0.75% at $93.99 by 12:50 p.m. ET – down $0.65 on the week – while WTI was trading up 0.88% on the day at $90.47. WTI is down more than $1 per barrel from this time last week.

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Gasoline inventories fell by 70,000 barrels this week, compared to the 732,000 barrel build in the previous week. Gasoline inventories of 732,000 barrels are about 3% below the five-year average for this time of year. Distillate inventories fell by 1.698 million barrels, adding to the 258,000 barrel draw in the prior week. Distillate inventories are about 14% below the five-year average for this time of year.

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Inventories at Cushing fell by an additional 828,000 barrels, following last week’s draw of 2.564 million barrels, leaving less than 22 million barrels in storage at Cushing.

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