The Energy Information Administration released its weekly petroleum status report today and the data showed oil stockpiles rising less by a less than expected amount and demand rising to its highest level for several years.
The US stockpile of crude oil increased for the ninth successive week, rising by 375,000 barrels to 388.5 million barrels. Economists surveyed by Reuters had forecast a rise of 900,000 barrels. Supplies at Cushing, Oklahoma continue to swell, rising to 39.9 million barrels.
The four-week moving average for demand of all fuels advanced 2.8% last week, with the four-week distillate demand up 8.8% from a year ago, reaching its highest level since late 2011.
Oil inventories coming in substantially below estimates and the boyant level of fuel demand had supported the price of oil earlier today, but the EIA report was overshadowed by the release of the minutes from the last FOMC meeting.
The minutes show that committee members when discussing stimulus generally expected economic data to continue to move in line with their outlook for improvements in the labour market and ‘thus warrant trimming the pace of purchases in coming months.’ This is probably the most specific reference to tapering that we’ve seen in official minutes from the Fed, and that has sent the stock market lower and the price of crude with it.
Shortly after the release of the minutes, US light crude oil futures for January had dropped 0.26% to $93.66 per barrel, having been up by a similar percentage earlier in the day.