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Crude Oil Holds Steady Despite Large Inventory Build

David Becker
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www.iforex.com

Crude oil prices held steady on Wednesday despite a larger than expected build report by both the American Petroleum Institute and the Department of Energy. Demand for gasoline has been the recent drive and should continue to show gains ahead of the US driving season.

Crude oil inventories grew well more than expected according to the latest report from the American Petroleum Institute. The API said that crude supplies more than double what the market expected, rising by 6.3 million barrels for the week ended March 21. Analysts surveyed had forecast a climb of 2.6 million barrels. The API reported gasoline stockpiles fell 2.8 million barrels, while distillate supplies edged up by 267,000 barrels. Analysts were looking for gasoline stockpiles to decline by 1.8 million barrels and distillate supplies to fall by 1 million barrels.

The DOE data showed a similar rise in crude oil but a very large draw in gasoline. U.S. crude oil inventories climbed by 6.6 million barrels during the previous week. Gasoline inventories decreased by 5.1 million barrels last week. Distillate fuel inventories increased by 1.6 million barrels last week but are below the lower limit of the average range for this time of year.

Over the last four weeks, motor gasoline demand averaged over 8.7 million barrels per day, up by 3.4% from the same period last year. Distillate fuel demand averaged over 3.7 million barrels per day over the last four weeks, down by 0.9% from the same period last year.

Hedge fund traders dumped long position in futures and options according to the latest commitment of traders report. According to the CFTC, managed money reduced long futures and options position by 7900 contracts while increasing short position by nearly 2000 contracts.

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