Crude oil trading outlook: WTI and Brent futures slide on bearish EIA report

WTI and Brent futures slid under pressure from the Energy Information Administration (EIA) weekly oil inventories report, which revealed a sizable increase of crude stocks in the US, with a significant weekly gain for imports.

WTI futures for October delivery on the New York Mercantile Exchange traded at $93.94 per barrel at 14:47 GMT today, down 0.99% for the day, while prices had ranged from $93.90 to $95.06 per barrel. The US benchmark added 2.1% on Tuesday, after a further 0.8% gain on Monday.

Meanwhile on the ICE in London, November Brent stood at $98.78 per barrel, down 0.27%, daily prices between $98.67 and $99.61 per barrel. The contract’s premium to November WTI widened to $5.68. The European brand added 1.2% yesterday.

The EIA report, which covers the week through September 12, revealed crude stocks had added 3.7 million barrels, in comparison with a 1.5m-1.8m draw forecasts. The result also largely matches the American Petroleum Institute (API)s reading of 3.3m gain. The build is only the third positive figure in 16 weeks.

Production of crude logged a slight increase to 8.8m barrels daily, which is almost 13% more than a year ago. Meanwhile, net imports of crude had increased some 7% since the previous week to 7.7m barrels per day, while also clocking ahead of year-ago levels by ~3%. The increase of imports is the main contributor to the significant crude stocks increase.

Stocks at Cushing, Oklahoma, the delivery point for the NYMEX West Texas Intermediate contract and the largest hub in the US, were slightly lower at 20m barrels.

Gasoline stocks were drawn by 1.6m barrels, which beat expectations of a 0.4m draw. Meanwhile, distillates, a category which includes diesel and heating fuel, were up 0.3m barrels.

Refineries operated at 93.0% of their operable capacity, slightly lower than the four-week average, though still a massive ~5% above the rate of two years ago. Gasoline production edged up to 9.2m barrels per day, while distillates output was slightly lower to average 4.9m.