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Oil Prices Slip On Huge Crude Inventory Build

Oil Prices Slip On Huge Crude Inventory Build

Crude oil prices fell today after the US Energy Information Administration reported that crude oil inventories added 9.4 million barrels in the week ending April 8.

At 421.8 million barrels, oil stocks are about 13 percent below the five-year average for this time of year.

Inventory increased last week compared to a build-up of 2.4 million barrels for the previous week. It also compares with an estimated inventory increase of up to 7.757 million barrels for the past week, the American Petroleum Institute reported.

However, the unexpected increase in inventory failed to move prices much lower, with both Brent and WTI both remaining above $100 a barrel.

For gasoline, the Energy Information Administration reported a stockpile draw of 3.6 million barrels last week, compared to an estimated drawdown of 2 million barrels for the previous week.

Gasoline production averaged 9.5 million barrels per day in the week ending April 8, compared to 9.1 million barrels per day during the previous week.

In middle distillates, which are a concern in the transportation sector due to supply shortages in particular, the EIA estimated a 2.9 million barrel inventory decline for the week ending April 8.

Middle distillate production averaged 4.7 million barrels per day last week, compared to 5 million barrels per day the previous week.

Earlier this week, oil prices recouped some of their recent losses as the United States and the International Energy Agency prepared to begin releasing a total of 240 million barrels of reserves to tame oil prices over the next six months.

However, OPEC faced the change in market sentiment when it rejected European Union calls for more production to help with efforts to tame prices. With the European Union currently discussing a possible oil embargo on Russia, OPEC President Muhammad Barkindo said this could lead to the loss of more than 7 million barrels of oil per day and that it would be “almost impossible” to replace all those barrels.

Oil prices jumped more than 4 percent soon after reports of the meeting began pouring in. Today, at the time of writing, Brent crude is trading at $106.30 a barrel, with West Texas Intermediate at $102 a barrel.

By Irina Slough for Oilprice.com

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