Investing.com -- Crude oil stockpiles grew last week, contrary to expectations as imports fell and refiners processed less fuel products, according to the Energy Information Administration.
Oil inventories rose 4.9 million barrels, the government said, compared to expectations for a draw of 2 million barrels.
"It looks like refiners literally took their foot off the gas pedal last week, producing less gasoline and diesel," said Investing.com expert analyst Barani Krishnan. "Concurrently, imports rose by 373,000 barrels to result in a net crude inventory gain of almost 5 million barrels. One swallow doesn’t make a summer; likewise this one bearish dataset won’t cool the ardor of oil bulls who are determined to reach $43 next on WTI, before heading for the bigger target of $45."
"The price action on NYMEX certainly reflects this, as we were off by just over 1% some 30 minutes into the data," Krishnan said. "The broader macro markets are processing a load of different variables from renewed U.S.-China tensions to the stimulus wrangle in Congress, and that’s also determining crude prices."
The industry's own estimate, which API released Tuesday, said oil inventories rose more than 7.5 million barrels last week, mostly reversing the 8.3 million draw the previous week. Crude prices settled near a four-month high on Tuesday before the unexpectedly large increase in inventory was disclosed.
"While the price action may not be much, one should bear in mind that this dataset effectively rolls back 67% of the previous week’s stated drawdown in crude," Krishnan said. "And we have the first U.S. production rise in five weeks with the EIA adding 100,000 barrels per day to the previous estimate of 11 million bpd. So, this dataset is definitely net bearish."
Oil stored at the Cushing, Oklahoma, facility rose 1.37 million barrels, far more than expectations for a build of 769,000 barrels.