Oil Prices Volatile After US CPI, API & EIA Reports
By Oil prices have been volatile in the beginning of 2023, as traders attempt to price the impact of China’s reopening, supply curbs announced by Moscow, and persistent concerns of a recession in the US. The American Petroleum Institute (API) reported a crude build of 10.507 million barrels for the week ending February 10.[0] This was followed by the US Energy Information Administration (EIA) report showing a 16.283 million barrel increase for the same week.[1] Gasoline inventories rose by 846,000 barrels, after last week’s API data showed the fuel inventories rising by 5.261 million barrels.[2] Distillates increased by 1.728 million barrels following an increase of 1.109 million barrels per day in the previous week.[2]
Oil prices dropped further on Tuesday after the US announced plans to sell 26 million barrels from its Strategic Petroleum Reserve.[3] OPEC increased its projection for global oil demand growth and pointed to a tighter market in 2023.[4] OPEC raised its forecast for growth in world oil demand this year by 100,000 barrels a day, bringing it to 2.3 million barrels a day.[3] The US inflation data early on February 14 also contributed to the downward pressure on oil prices.
West Texas Intermediate (WTI) crude oil was down following the US CPI but recovered to start the week. WTI fell initially to a support area that guards a move towards $77.00bbls.[5] The Strategic Petroleum Reserve will fall to its lowest level in over 40 years as a result of the administration’s decision to move forward with the mandated sale.[6] WTI settled near $79 a barrel, slipping on the day but clawing back from over a 3% drop early in the session.
EIA weekly US oil inventories +16283K vs +1166K expected, with headline crude +1.1 mn barrels. U.S. crude oil inventories as of February 10 were +7.3% above the seasonal 5-year average, gasoline inventories were -4.9% below the seasonal 5-year average, and distillate inventories were -15.3% below the 5-year seasonal average.[7] U.S. crude oil production in the week ended February 10 was unchanged w/w at a 2-3/4 year high of 12.3 million bpd.[7]
0. “U.S. crude stockpiles rose 10.5M barrels last week, API says (NYSEARCA:USO)” Seeking Alpha, 14 Feb. 2023, https://seekingalpha.com/news/3936091-us-crude-stockpiles-rose-105m-barrels-last-week-api-says
1. “Oil Trading Daily: Oil Closes Lower Amid Higher Inventory” TipRanks, 15 Feb. 2023, https://www.tipranks.com/news/oil-trading-daily-oil-continues-to-fall-amid-higher-inventory
2. “Massive Crude Build Pressures Oil Prices” OilPrice.com, 14 Feb. 2023, https://oilprice.com/Latest-Energy-News/World-News/Massive-Crude-Build-Pressures-Oil-Prices.html
3. “Oil prices drop as the US plans to sell more oil from strategic reserve” Markets Insider, 14 Feb. 2023, https://markets.businessinsider.com/news/commodities/oil-prices-spr-crude-petroleum-reserve-energy-global-market-supply-2023-2
4. “Oil little changed as market discounts big U.S. crude storage build” CNBC, 15 Feb. 2023, https://www.cnbc.com/2023/02/15/oil-prices-drop-as-us-inventories-jump-fuels-demand-worries.html
5. “WTI Price Analysis: Bulls and bears in battle it out at key support” FXStreet, 15 Feb. 2023, https://www.fxstreet.com/news/wti-price-analysis-bulls-and-bears-in-battle-it-out-at-key-support-202302150018
6. “Oil Retreats on US Plan to Sell More Oil From Strategic Reserve” Bloomberg, 13 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-13/oil-drops-on-us-plan-to-sell-more-oil-from-strategic-reserve
7. “Crude Falls On Dollar Strength And Surge In EIA Crude Inventories” Barchart, 15 Feb. 2023, https://www.barchart.com/story/news/14237607/crude-falls-on-dollar-strength-and-surge-in-eia-crude-inventories
