Oil Tumbles as Gasoline Supplies Rise

Gasoline inventories increased by 2.1 million barrels last week

The EIA said new production from non-OPEC  producers will be more than enough to meet growth in demand next year

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NYMEX crude fell to $44.70 from $46.20 per barrel following the EIA inventory data which showed gasoline inventories increased by 2.1 million barrels last week.

The street had been expecting a draw of 500k bbls in gasoline supplies. The EIA inventory data also showed a 1.7M bbl fall in crude stocks. The street had been expecting a 2.5 M bbl increase, though the API reported a 2.8 M bbl increase on Tuesday.

The International Energy Agency also said new production from non-OPEC  producers will be more than enough to meet growth in demand next year thus offsetting any cutbacks from OPEC. The U.S., Brazil, Canada and other producers outside OPEC will increase output next year by the most in four years, the IEA said in its initial forecast for 2018.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.7 million barrels from the previous week. At 511.5 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year.

Meanwhile, distillate stocks were up 300k bbls, versus expectations for a 0.5 M bbl rise. Refinery usage rose to 94.4% from 94.1%.

Total products supplied over the last four-week period averaged 20.1 million barrels per day, down by 1.2% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 9.5 million barrels per day, down by 1.2% from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels per day over the last four weeks, up by 4.1% from the same period last year. Jet fuel product supplied is up 2.7% compared to the same four-week period last year.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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