Crude oil prices moved lower today after the U.S. Energy Information Administration reported an estimated inventory increase of 2.9 million barrels for the week to December 15.
This followed a weekly inventory decline of 4.3 million barrels for the previous week. The estimate also came out a day after the American Petroleum Institute reported its own inventory estimate, which saw oil stocks adding close to a million barrels over the week to December 15.
In fuels, the EIA estimated inventory builds.
Gasoline inventories added 2.7 million barrels during the reporting period, with production averaging 10 million barrels daily.
This compared with an inventory increase of a modest 400,000 barrels for the previous week, when production stood at an average 9.5 million barrels daily.
Middle distillate stocks, meanwhile, rose by 1.5 million barrels daily last week, with production averaging 4.9 million barrels per day.
This compared with an inventory build of 1.5 million barrels for the previous week, when production averaged 5 million barrels daily.
Earlier this year, there was a threat of a shortage in middle distillates, especially diesel but slower economic growth in large consumers such as the U.S. led to lower energy consumption from massive diesel guzzlers in manufacturing and construction, which has minimized the threat.
Oil, meanwhile, has been climbing up after all global shippers said they would start bypassing the Red Sea on security fears and BP followed, announcing its tankers will temporarily stop traversing the Bab el Mandeb strait.
The news sent oil higher and prompted a statement from Washington that it would set up a task force to increase military presence in the region to better respond to attacks on vessels from Yemen.
The Bab el Mandeb strait is a chokepoint on the way to the Suez Canal that handles about 12% of global trade and a solid portion of global oil trade.