Record Supply and Record Imports
Oil was a tale of two stories, record demand and record imports. Oil had rallied after China reported record demand and the U.S. reported record petroleum products in storage. Brent crude also dipped below $30 a barrel as the market is pricing in more Iranian oil and the resumption of U.S. oil exports. This comes against a backdrop of turmoil in the oil industry that is trying to survive against a historic price collapse.
Oil prices did rally after China reported record import faltered after The Energy Information Administration reported that commercial petroleum inventories increased by 10.0 million barrels last week, hitting an all- time record. There are worries that supply could rise further as the shoulder season or weak demand season approaches. U.S. oil production also continues to grow. It rose to 9.2 million barrels a day last week, EIA data shows.
U.S. exports also are giving WTI an edge over Brent along with expectations that Iranian oil will be released onto the market.
The EIA reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.2 million barrels from the previous week. At 482.6 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 8.4 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 6.1 million barrels last week and are above the upper limit of the average range for this time of year. Propane/propylene inventories fell 4.5 million barrels last week but are well above the upper limit of the average range.