The Energy Information Administration reported a 1.4-million-barrel increase in crude oil inventories for the week to June 19, with fuel inventories booking mixed results.
This compares with an inventory build of 1.2 million barrels the EIA reported for the previous week, and a 1.75-million-barrel inventory increase reported a day earlier by the American Petroleum Institute.
At 540.7 million barrels, U.S. crude oil inventories are still above the five-year average for this time of the year and demand improvement seems to be going more slowly than hoped, as suggested by the change in fuels.
In gasoline, the EIA reported an inventory draw of 1.7 million barrels for the week to June 19, compared with a decline of the same size for the previous week. Gasoline production last week averaged 8.8 million barrels daily, up from 8.4 million barrels daily a week earlier.
In distillate fuels, where demand has been slower to recover than in gasoline, the EIA reported an inventory rise of 249,000 barrels for the week to June 19, up from a 1.4-million-barrel draw reported for the previous week. Production of distillates averaged 4.6 million bpd last week, compared with 4.5 million bpd a week earlier.
Refinery runs averaged 13.8 million bpd, up from 13.6 million bpd a week earlier.
Oil price started the week with gains, spurred by growing optimism about the recovery of demand and quenched worry regarding the U.S.-China trade deal that President Donald Trump said on Monday was intact.
The rally came to an end later in the week, however, as fears about demand took the upper hand over recovery optimism. Even so, some banks have updated their oil price forecasts to higher levels. Bank of America was the latest, on Monday revising its forecast of West Texas Intermediate by as much as US$7.70 a barrel to US$39.70 for this year. For next year, BofA expects the U.S. benchmark to average US$47 a barrel.
At the time of writing, Brent crude was trading at US$41.47 a barrel, with WTI at $39.34, both down by more than 2 percent on Tuesday’s close.