Investing.com — Crude stockpiles rose by less than expected last week, according to the latest government data.
rose 768,000 barrels compared to expectations for a build of 1.65 million barrels, according to the Energy Information Administration. The week before that saw an increase of 4.27 million barrels.
The rising inventory over the last couple of weeks casts confusion on the outlook for the economic recovery. Demand for oil has fluctuated throughout the fall, with inventory levels falling three of the five previous weeks. The American Petroleum Institute said Tuesday that its own estimate had crude stocks rising 4.2 million barrels last week.
Oil stored at , Oklahoma, rose 1.2 million barrels against expectations for a build of 2.15 million barrels.
, the U.S. benchmark for oil prices, rose more than 1% on Wednesday morning, to $42.19.
“Another bright spot for oil longs in this report is, of course, the huge draw in that was more than triple forecasts, at 5.2 million barrels versus expectations of 1.5 million.
But there are two red flags in this report and they are important,” said Investing.com analyst Barani Krishnan.
“The first is the of 2.6 million versus forecasts of under 100,000 barrels. This reinforces the flagging seasonal demand for fuels — something that you can’t make up, no matter how much noise OPEC makes. may have crossed $42 a barrel, but the gasoline number is almost always the key variable for its continued rally. That doesn’t look too good now.
“The second is production, which the EIA estimates is closer to 11 million barrels per day, up 400,000 bpd from the previous week. This is affirmation that the steadily rising count is starting to impact production,” Krishnan said.
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