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WTI Slides On Huge Crude Inventory Build

The American Petroleum Institute (API) estimated on Tuesday a huge crude oil inventory build of 11.938 million barrels for the week ending April 4 as demand destruction stemming from the coronavirus wears on.

Today’s inventory move was expected to be for a large build of 9.27 million barrels.

In the previous week, the API estimated a large build in crude oil inventories of 10.485 million barrels, while the EIA’s estimates were even more bearish, reporting a build of 13.8 million barrels for the week.

Oil prices were trading sharply down on Tuesday afternoon prior to the API’s data release.

At 4:02 pm EDT on Tuesday the WTI benchmark was trading down on the day by $1.65 (-6.33%) at $24.43, although it is still up $4 per barrel week over week. The price of a Brent barrel was also trading down on Tuesday, by $0.70 (-2.12%), at $32.35—up by roughly $6 week on week. The higher prices over last week was due mainly to optimism that OPEC+ could reach a production cut deal and bring other states on board the cuts as well.

The API reported a large build of 9.445 million barrels of gasoline for week ending April 4, after last week’s 6.085-million-barrel build. This week’s build compares to analyst expectations for a 4.333-million-barrel build for the week.

Distillate inventories were down, by 177,000 barrels for the week, compared to last week’s 4.458-million-barrel draw, while Cushing inventories saw a large gain of 6.804 million barrels.

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US crude oil production as estimated by the Energy Information Administration showed that production for the week ending March 27 was unchanged at 13.0 million bpd.

At 4:36 pm EDT, WTI was trading at $24.05 while Brent was trading at $32.04.

By Julianne Geiger for Oilprice.com

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