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Oil Inventories Unexpectedly Jump by 3.8M Barrels Adding to Demand Fears: API

Commodities Jul 06, 2022 04:38PM ET
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© Reuters

By Yasin Ebrahim

Investing.com -- U.S. crude oil inventories unexpectedly increased last week, confounding expectations for a decline and adding to the bulging weight of expectations that energy demand destruction is underway amid growing fears of a recession.         

West Texas Intermediate, the U.S. benchmark, traded at $98.00 per barrel following the report after settling down $0.97 at $98.53 per barrel, a 12-week low.

U.S. crude inventories increased by about 3.8 million barrels for the week ended June 30. That compared with a draw of 3.8 million barrels reported by the API for the previous week. Economists were expecting a decrease of about 1.1 million barrels. 

The API data also showed that gasoline inventories fell by 1.8 million barrels last week, while distillate stocks decreased by about 635,000 barrels. 

Bets on oil prices likely heading lower rather than higher have increased, pushing oil prices further under $100 a barrel this week as markets price in the prospect of a global recession and the likely hit to energy demand. 

Citigroup warned earlier this week that oil prices could plummet to $65 a barrel by the end of this year and fall to about $45 by the end of 2023 if the economy falls into recession.

The official government inventory report due Thursday is expected to show weekly U.S. crude supplies fell by about 1.0 million barrels last week.

Oil Inventories Unexpectedly Jump by 3.8M Barrels Adding to Demand Fears: API
 

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Comments (20)
Jeff Kenkel
Jeff Kenkel Jul 07, 2022 8:58AM ET
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Election year
Todd Gray
Todd Gray Jul 07, 2022 12:38AM ET
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They stopped stalling tanker deliveries.
Tommy Lambert
Tommy Lambert Jul 06, 2022 9:09PM ET
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Just before the July 4th weekend, of course inventories are up. Why is that a surprise?
Ze Cap
Ze Cap Jul 06, 2022 7:27PM ET
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would game theory explain this sh....?
Benson Njonjo Ndehi
Benson Njonjo Ndehi Jul 06, 2022 7:07PM ET
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It's demand destruction, not demand distraction.
Barani Krishnan
Barani Krishnan Jul 06, 2022 7:07PM ET
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A typo, yes. Thanks for the catch. We'll get the desk to fix. Bests.
Barani Krishnan
Barani Krishnan Jul 06, 2022 7:07PM ET
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Fixed. Thanks again.
Andrew Ulferts
Andrew Ulferts Jul 06, 2022 7:07PM ET
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I think that was a Fraudian slip
Hypa Spazz
Hypa Spazz Jul 06, 2022 6:51PM ET
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And then the EIA report tomorrow will show that the SPR was drawn down another 7M for the week giving a net draw of 3.2M.
John Berry
John Berry Jul 06, 2022 6:51PM ET
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Numbers are made up. BS
하트 라이온
하트 라이온 Jul 06, 2022 6:50PM ET
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What about the russia effect?
하트 라이온
하트 라이온 Jul 06, 2022 6:50PM ET
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What about the russia effect?
Spek Trader
Spek Trader Jul 06, 2022 5:47PM ET
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so great it was not only me that noticed "distraction" and correct term Demand Destruction. Have to keep reminding myself these are glorified blogs
 
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