Crude oil prices went lower today after the U.S. Energy Information Administration reported an inventory increase of 7.3 million barrels for the week to April 26.
This compared with a substantial draw of 6.4 million barrels for the previous week that pushed prices temporarily higher last week.
In gasoline, the authority reported an inventory rise of 300,000 barrels for last week, which compared with a modest draw of 600,000 barrels for the week before.
Gasoline production averaged 9.4 million barrels daily in the week to April 26, which compared with 9.1 million barrels daily during the previous week.
In distillate fuels, the EIA estimated an inventory draw of 700,000 barrels for the reporting period, with production averaging 4.5 million barrels daily.
Last week’s figures compared with an inventory build of 1.6 million barrels for the previous week, when production averaged 4.8 million barrels daily.
Last year, there was substantial concern that distillate production was consistently below demand prospects but now it appears the tables have turned and fears are rising about possible oversupply.
Reuters reported earlier this week that fuel traders were in a rush to secure storage space for their distillate stocks along the East Coast as demand underwhelmed. The report suggested warmer than usual winter was the culprit behind lower diesel and heating oil demand.
This lower demand pushed profit margins for refiners down substantially during the first quarter of the year, affecting their quarterly bottom lines, the report also said.
Oil prices, meanwhile, slipped further down today on the American Petroleum Institute’s latest weekly inventory report that showed a 4.9-million-barrel increase in crude oil stocks for the week to April 26. Support for lower prices also came from continued expectations of a ceasefire between Hamas and Israel.
Countering the decline, OPEC crude oil production declined by 100,000 barrels daily in April, according to a Reuters survey. The survey showed lower exports of crude from Iran, Iraq, and Nigeria, with the cartel’s total output at 26.39 million barrels daily during last month.