Oil Prices Collapse As The EIA Reports Unexpected Inventory Build

The Energy Information Administration poured ice cold water on the budding hope that inventory levels in the world’s largest oil consumer may be normalizing, by reporting a 3.3-million-barrel build in commercial stockpiles for the week to June 2. That happened a day after the API reported a draw of 4.62 million barrels, with analysts expecting the API to report a draw of 3.5-million barrels for last week—but even with expectations for another draw in inventories, prices failed to show any significant enthusiasm, jumping briefly before sagging down again on Tuesday. EIA’s figures will likely strengthen the downward trend. The EIA reported that at 513.2 million barrels, crude oil inventories were within seasonal limits, however, with refineries processing over 17.2 million barrels of oil daily. Imports averaged 8.3 million barrels daily, up by 356,000 bpd from the previous week, but we may see declines in the coming weeks after Saudi Arabia announced its plans to cut shipments to one of its biggest clients as it continues to shrink output in line with the recently extended OPEC-wide production cut agreement...more