API reports significant drop in crude oil inventories

U.S. crude oil inventories fell this week by 5.205 million barrels in the week ended Aug. 9, according to The American Petroleum Institute (API), after analysts had predicted a decline of less than 2 million barrels.

For the previous week, the API reported a 180,000-barrel increase in crude oil inventories.

So far this year, crude oil inventories are close to where they were at the start of the year, rising by 400,000 barrels, according to API data.

On Monday, the Department of Energy (DoE) reported that crude oil stocks in the Strategic Petroleum Reserve (SPR) increased by another 0.7 million barrels since August 9. Inventories are now at 376.5 million barrels.

Oil prices slipped on Tuesday ahead of the API data release. At 3:48 PM ET, Brent crude was trading down $1.69 (-2.05%) on the day at $80.61. While the decline of the day, it increased by more than 4 dollars per barrel compared to this time last week. U.S. benchmark WTI traded down $1.83 (-2.29%) on the day at $78.23, up about $5 a barrel from this time last week.

Gasoline inventories also fell this week by 3.689 million barrels, more than offsetting last week’s gain of 3.31 million barrels. Analysts had predicted a draw of 1.1 million barrels. As of last week, gasoline inventories are 2 percent below the five-year average for this time of year, according to the latest EIA data.

Distillate stocks rose this week by 612,000 barrels, on top of last week’s 1.22 million barrel gain. Analysts had forecast a drawdown of 1.8 million barrels. Distillates were about 6 percent below the five-year average for the week ended Aug. 2, the latest EIA data showed.

Cushing inventories drew 2.277 million barrels, according to API data, reversing a 1.07 million barrel build in the previous week.

By Julianne Geiger

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