Oil holds gains as large Gasoline draw offsets crude build

The American Petroleum Institute (API) reported on Tuesday a build in crude oil inventories of 691,000 barrels for the week ending September 18.

Analysts had predicted an inventory draw of 2.256-million barrels.

In the previous week, the API reported a significant draw in crude oil inventories of 9.517 million barrels, after analysts had predicted a smaller draw of 1.271 million barrels.

Oil prices were trading up modestly on Tuesday afternoon before the API’s data release, despite the worsening demand sentiment in the market brought on by reports of increasing coronavirus cases.

In the hours leading up to Tuesday’s data release, at 12:44 pm EDT, WTI had risen by $0.19 (+0.48%) to $39.50, up $1.30 per barrel on the week. The Brent crude benchmark had risen by $0.18 at that time (+0.39%) to $41.60.

Oil production in the United States rose during the last week, but it is still down significantly from a high of 13.1 million bpd on March 13. U.S. oil production currently sits at 10.9 million bpd, according to the Energy Information Administration—2.2 million bpd under those March highs.

The API reported a draw in gasoline inventories of 7.735 million barrels of gasoline for the week ending September 11—compared to last week’s 3.762-million-barrel build. Analysts had expected a much smaller 614,000-barrel draw for the week.

Distillate inventories were down by 2.104 million barrels for the week, compared to last week’s 1.123-million-barrel draw, while Cushing inventory rose by 298,000 barrels.

At 4:33 pm EDT, the WTI benchmark was trading at $39.55 while Brent crude was trading at $41.74.