U.S. West Texas Intermediate and international-benchmark crude oil futures are trading nearly flat on Wednesday after clawing back from earlier losses.
Prices were pressured late Tuesday and early Wednesday after industry data showed a surprise build in U.S. crude stocks last week as a deep freeze in the southern states curbed demand from refineries that were forced to shut.
American Petroleum Institute Weekly Inventories Report
The API reported on Tuesday a build in crude oil inventories of 1.026 million barrels for the week-ending February 19. Analysts had predicted an inventory draw of 5.190 million barrels for the week.
The API also reported a small build in gasoline inventories of 66,000 barrels for the week-ending February 19 – after the previous week’s 3.9-million-barrel build. Analysts had expected a 3.062-million-barrel draw for the week.
Distillate stocks saw a decrease of 4.489 million barrels for the week, after last week’s 3.5-million-barrel draw for the week.
Cushing inventories rose by 2.783 million barrels. Last week, inventories held in Cushing decreased by 3.0 million barrels.
API data showed refinery crude runs fell by 2.2 million bpd.
Saudi Arabia and Russia are Headed for Another Clash on OPEC+ Oil Cuts
Oilpice.com is saying the leaders of the OPEC+ alliance, Saudi Arabia and Russia, are reportedly once again at odds over oil supply management ahead of another crucial meeting of the group next week.
OPEC’s top producer and de facto leader Saudi Arabia would likely prefer the March 3-4 meetings to decide that the OPEC+ coalition holds production flat in April, Bloomberg reported.
However, the key Saudi partner in the deal Russia, will likely be pushing for further easing of the production cuts, especially Russian Deputy Prime Minister Alexander Novak said earlier this month that the global oil market has balanced and the current price of oil fully reflected this market situation.
There, the two leaders of the pact are once again going into an OPEC+ meeting with diverging views on how to manage supply to the market.
Oil producers need to remain extremely cautious as uncertainty on the market is still very high, Saudi’s Energy Minister, Prince Abdulaziz bin Salman, said last week.
Some traders believe the crude oil market has overshot to the upside and may be ripe for a correction. They cite the fact that prices have rallied above pre-pandemic levels without a similar increase in demand.
Later today at 15:30 GMT, the U.S. Energy Information Administration (EIA) will release its weekly inventories data. The report is expected to show a 6.5 million barrel drawdown.
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