Oil Prices Slide On Major Gasoline Build


Oil Prices Slide On Major Gasoline Build

Late Tuesday, the American Petroleum Institute, an industry group, released data showing a 9.2 million-barrel rise in gasoline stocks and a 4.3 million-barrel increase in distillate inventories for the week ended December 1, even as crude stocks came down by 5.5 million barrels.

EIA data, once it's released, will help determine the direction for crude oil prices for the rest of the trading day and into Thursday morning.

In parallel, oil imports declined by 127,000 barrels a day from the week before to an average rate of 7.2m b/d.

Inventories at the Cushing, Oklahoma, site decreased by 1.951 million barrels this week. It reported that U.S. gasoline and distillate inventories rose by 9,200,000 barrels and 4,300,000 barrels on November 24-December 1, 2017.

USA gasoline stockpiles built sharply during the latest reference week, resulting in a sharp drop in crude oil inventories. Unprecedented flooding from the Category 4 storm that slammed into the state's coast last week, sending gasoline prices surging as oil refineries shut, may also set a record for rainfall in the contiguous USA, the weather service said Tuesday.

Oil-market observers will be watching closely Wednesday for official weekly data from the U.S. Energy Information Administration. Distillate product supplied averaged over 3.9 million barrels a day for the past four weeks, up by 0.6% compared with the same period a year ago. The API report showed an increase of 9.196 million barrels, compared to forecasts of a much smaller 1.145-million-barrel build.

"This bears all the hallmarks of a year-end lull in USA fuel demand, which in turn should help safeguard the current bout of range-bound trading", said Stephen Brennock, an analyst at PVM Oil Associates Ltd.in London.

The United States Oil ETF (NYSEARCA: USO) traded down about 1.5%, at $11.37 in a 52-week range of $8.65 to $12.00.