API shows significant reduction in rough stocks

The American Petroleum Institute (API) reported a larger-than-expected drawdown for crude oil of 3.479 million barrels this week, compared to analysts’ forecast of a drawdown of 1.167 million barrels.

U.S. crude inventories have fallen some 73.5 million barrels since the start of 2021 and about 17.5 million barrels since the start of 2020.

The previous week, the API reported a surprise drop in crude oil inventories of 4.784 million barrels after analysts predicted a buildup of 2.167 million barrels.

Analysts and traders interviewed by the the wall street journal early today predicted a 200,000 drop in US oil inventories and a 300,000 barrel drop in gasoline inventories.

Of the 11 analysts polled by the WSJ, seven predict a decrease and four an increase in crude oil inventories.

They also expect distillates to register a drop of up to 1.5 million barrels.

Crude oil prices remained bullish on Tuesday following the latest signal from the European Union that it is preparing to impose an oil embargo on Russia.

China Covid lockdowns continued to put downward pressure on benchmarks, temporarily reversing higher prices, but upside potential remains substantial, especially after BP CEO Bernard Looney told Reuters he expected Russia’s oil deficit to double from 1 million bpd to 2 million bpd this month.

WTI was trading down 2.51% at $102.50 a barrel on the day as of 4:30 p.m. EST and down about 2% on the week. Brent crude was trading up 3.63% on the day at $105.90 a barrel, down 2.31% from Monday.

The API also reported a drop in gasoline inventories of 4.50 million barrels for the week ending April 29, following the previous week’s draw of 3.91 million barrels.

Distillate inventories recorded a decrease in inventories of 4.457 million barrels for the week compared to last week’s increase of 431,000 barrels.

Cushing saw a build of 0.978 million barrels this week. According to EIA data as of April 22, Cushings inventories rose to 27.450 million barrels, from 59.2 million barrels at the start of 2021 and from 37.3 million barrels at the end of 2021.

By Julianne Geiger for Oilprice.com

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