The trend in recent weeks has been for expanding oil inventories, both for the US as a whole and for the price-important point of Cushing, Oklahoma.
A report released today by the Energy Information Administration, the statistical arm of the Energy Department, revealed the US stockpile of crude oil swelled by 4.09 million barrels last week, far higher than the 2.4 million increase that had been forecast by analysts. The rise, the sixth in a row, takes the total stockpile to 383.9 million barrels.
Such a sustained trend of increases in US supplies is a bearish sign, given the US is the world’s largest consumer of oil, and by mid-afternoon in New York, US light crude oil futures were trading down 1.56% at $96.70 a barrel.
Crude inventories at Cushing,Oklhaoma – the price settlement point for crude oil futures traded in New York – rose by 2.18 million barrels, reaching a two-month high of 35.5 million barrels.
There are signs that the run of inventory builds may be topping out, however. US crude output dropped by 43,000 barrels a day to 7.85 million, although this remains high historically and still exceeds imports.
Refinery utilisation began to pick back up last week, rising to 87.3%, as we head out of the autumn lull period. A drop in inventory levels of refined products suggests strong demand, which may see those refinery rates crank up higher in weeks to come.