Oil Falls As EIA Reports Large Crude Inventory Build

The price of crude oil fell today after the Energy Information Administration reported that 4.5 million barrels of crude oil had built up in the week to July 29.

This compared to a similar draw the week before. U.S. crude inventories stand at 426.6 million barrels, which is 7 percent lower than the five-year average for this time of year.

The American Petroleum Institute reported an unexpected crude oil supply of more than 2 million barrels yesterday, while analysts had forecast a modest decline of less than 500,000 barrels for the week to July 29.

The EIA estimates a mixed picture for fuels.

Gasoline inventories rose a modest 200,000 barrels in the week to July 29, with production averaging 9.3 million barrels per day.

This compares with a decrease of 3.3 million barrels and a production of 9.7 million barrels per day in the previous week.

In middle distillates, the EIA estimated a stock decrease of 2.4 million barrels for the week to July 29, with production averaging 4.9 million barrels per day.

This compares with a stock intake of 800,000 barrels in the previous week and an average production of 5 million barrels per day.

Refineries processed 15.9 million barrels per day of crude oil last week, with a capacity of 91 percent. This compares to 16 million bpd the week before, with refineries operating at 92.2 percent of capacity.

Middle distillate supplies have tightened, with US exports hitting records as European buyers eschew Russian diesel and other distillate fuels. However, this is a concern in the domestic market, where demand will increase in the coming weeks as the harvest season begins in the Midwest.

Oil prices, meanwhile, were weighed down by recession concerns over the United States. Traders are also waiting for today’s OPEC+ meeting, where the cartel will say whether or not it will increase production in September.

At the time of writing, Brent crude was trading at $100.40 a barrel, with West Texas Intermediate at $94.24 a barrel, both lower from opening.

By Irina Slav for Oilprice.com

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