The latest weekly American Petroleum Institute (API) inventory data for the week ending February 24th reported a build of 2.5 million barrels. This build followed a draw of 0.88 million barrels the previous week and was slightly lower than consensus estimates for a build of around 2.9 million barrels.
Ahead of this week’s data, EIA inventories had increased for the past seven weeks and the API data has now reported a build in seven of the last eight weeks.
Gasoline inventories recorded an unexpected build of 1.84 million barrels after a draw of 0.89 million barrels last week. Distillate, however, recorded a second successive sizeable draw with a drop of 3.73 million barrels following a draw of 4.23 million barrels last week and the overall data impact was mixed.
Cushing recorded a build of 544,000 barrels, only the second build in eight weeks.
There were reports on Tuesday that OPEC compliance with production cuts held strong in February at around 94% according to industry sources. Oil prices, however, dipped sharply early in the US session on Tuesday with WTI sliding as a break of $53.80 support helped trigger stop-loss selling and prices dipped to lows near $53.20.
Prices rallied after the European close with technical factors important on the last trading day of February while a recovery in gasoline prices also helped underpin crude, although there was resistance on approach to the $54.00 p/b level.
WTI oil prices ticked slightly lower from $53.90 on the API release, but losses were limited and prices then edged into positive territory before fading again as a fresh challenge on the $54.00 p/b resistance area was repelled.
Wednesday’s Energy Information Administration (EIA) inventory release is again likely to lead to further choppy trading conditions. The fuel data has been an important element over the past few weeks and production levels will again have a significant impact with markets looking to see whether output held above the 9.00 million bpd level.