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Oil Rebounds On Smaller Than Expected Crude Build

Source the Ghana Report

Crude oil prices gained slightly after the Energy Information Administration confirmed the API’s estimate of an inventory build for the week to February 25.

Crude oil inventories added 1.2 million barrels in the reporting period, the EIA said, adding that at 480.2 million barrels they were 9 percent above the five-year average for this time of the year.

A wek earlier, the EIA estimated an inventory build of 7.6 million barrels for crude oil, following another one, of 16.3 million barrels, which was the result of data adjustment.

In fuels, meanwhile, the EIA reported a mixed picture. Gasoline stocks fell and middle distillate inventories went up.

In gasoline, the EIA estimated an inventory decline of 900,000 barrels for the last full week of February, which compared with a decline of 1.9 million barrels for the previous week.

Gasoline production averaged 9.7 million barrels daily last week, which compared with 9.4 million barrels a week earlier.

In middle distillates, the EIA estimated a modest inventory build of 200,000 barrels for the last week of February. This compared with a build of 2.7 million barrels for the previous week.

Distillate fuel production last week averaged 4.6 million barrels daily, which compared with 4.7 million bpd a week earlier.

Refineries processed 15 million barrels daily last week, which was down by 31,000 bpd from the previous week.

Oil prices, meanwhile, were on the rise earlier today, following the release of new factory data from China, suggesting activity was picking up in line with expectations of a fast rebound from last year’s Covid lockdowns. Later, however, rising global output pressured benchmarks.

The U.S. inventory data has been acting as a counterweight to Chinese data’s effect on oil prices in the past few weeks yet analysts still expect consistently high oil prices later this year as the pace of China’s recovery accelerates.

At the time of writing, Brent crude was trading at $83.12 a barrel and West Texas Intermediate was trading at $76.52 a barrel, both down from opening after an initial increase earlier in the day.

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