Crude Inventories Rise, WTI Oil Pulls Back From Session Highs

Key Insights

• Crude inventories grew by 8.4 million barrels. 
• Domestic oil production declined by 100,000 bpd. 
• Strategic Petroleum Reserve levels remained intact.

Crude Inventories Exceed Analyst Expectations

On January 19, EIA released its Weekly Petroleum Status Report, which indicated that crude inventories increased by 8.4 million barrels from the previous week. Analysts expected that crude inventories would decline by 0.6 million barrels.

Crude inventories are rising for the fourth week in a row. At current levels, crude inventories are about 3% above the five-year average for this time of the year.

Total motor gasoline inventories grew by 3.5 million barrels from the previous week, while distillate fuel inventories declined by 1.9 million barrels. Motor gasoline and distillate fuel inventories are well below the five-year average for this time of the year.

U.S. crude oil imports increased by 0.5 million bpd from the previous week, contributing to the material increase in crude inventories.

Interestingly, domestic oil production declined by 100,000 bpd. U.S. oil production has been stuck in the 12.0 million – 12.2 million bpd range for weeks.

The Strategic Petroleum Reserve levels remained at 371.6 million barrels, so the U.S. was not selling oil from its strategic reserves.

WTI Oil Pulls Back After EIA Data

The decline in domestic oil production could have served as a bullish catalyst, but traders focused on rising crude inventories, and WTI oil pulled back from session highs.

Currently, WTI oil is trying to settle below the $80 level. Brent oil has also found itself under pressure and made an attempt to settle below $85.

The general market sentiment could have served as an additional bearish catalyst for oil markets. U.S. stocks are under strong pressure today amid recession worries, and traders’ appetite for risk is decreasing.

For a look at all of today’s economic events, check out our economic calendar.