WTI Slides After Biggest Crude Build Since January

Oil prices are down this morning as signs of a large gain in US crude stockpiles undermined comments by the United Arab Emirates and Saudi Arabia about tight market conditions.

In the US, API reported overnight that crude inventories rose 7.1 million barrels last week. That would be the largest increase since January if confirmed by government data due later on Wednesday.

The expected inventory gain threw some cold water on UAE Energy Minister Suhail Al Mazrouei’s comments that a lack of major inventory buildups shows the market needs the production that OPEC+ is reviving, while Saudi Aramco sees healthy global demand despite trade challenges and tariffs.

API

Crude +7.1mm

Cushing +100k

Gasoline -2.2mm

Distillates -800k

DOE

Crude +7.07mm – biggest build since Jan

Cushing +464k

Gasoline -2.66mm

Distillates -825k

The official data confirmed API’s big crude build while products saw inventories drawdown…

Source: Bloomberg

With the 238k addition to SPR, total crude stocks rose by the most since January last week…

Source: Bloomberg

US crude production remains just off record highs, even as the US rig count plunges…

Source: Bloomberg

WTI Crude is well off the highs of the day now…

Source: Bloomberg

“Current market conditions are reasonably tight,”said Ole Hansen, head of commodity strategy at Saxo Bank A/S.

“But I’m still somewhat concerned a surplus will grow into the autumn months as demand slows.”

In another headwind, Israel foreign minister Gideon Sa’ar says a ceasefire in the nearly two-year conflict in Gaza, as well as a hostage deal, is “achievable,” according to the AFP.