The American Petroleum Institute (API) estimated that crude inventories rose by 11.4 million barrels in the week ending February 20. The figure contrasts with the 609,000-barrel decline recorded the previous week.
In addition, the figure far exceeded market expectations, which had anticipated a much more modest increase of 1.85 million barrels. This gap triggered selling in the futures markets and reinforced the perception of looser supply in the short term.
U.S. production keeps rising
Meanwhile, U.S. oil production rose again. According to the latest data from the Energy Information Administration (EIA), output reached 13.735 million barrels per day in the week ending February 13.
This represents an increase of 22,000 barrels per day from the previous week and 238,000 barrels per day more than in the same period last year. Likewise, strong production cements the United States as one of the key players in the global energy market.
The Strategic Reserve and Cushing expand inventories
In parallel, the Department of Energy reported that stocks in the Strategic Petroleum Reserve stood at 415.4 million barrels. Although the level remains below its maximum capacity, the trend shows a gradual recovery.
Meanwhile, inventories at Cushing, the delivery point for the WTI futures contract, rose by 1.79 million barrels after falling the previous week. This move is significant because it directly influences the price of U.S. crude.
Gasoline and distillates send mixed signals
However, gasoline inventories fell by 1.53 million barrels during the week analyzed. Even so, they remain 3% above the 5-year average for this time of year.
Similarly, distillate inventories posted a decline of 2.77 million barrels. In this case, levels are 5% below the five-year average, which could indicate adjustments in demand or industrial activity.
Oil prices react moderately
As a result of the increase in crude inventories, the oil price posted moderate declines. At 4:14 PM ET, Brent was trading at $71.40 per barrel, down 0.13%. Meanwhile, WTI stood at $66.22 after losing 0.14%.
However, Brent is up nearly $1 per barrel from the previous week, showing that the market remains focused on other factors such as geopolitics and the evolution of global demand.
What is the energy market signaling?
The sharp rise in crude inventories reinforces the perception of a market with greater supply availability in the United States. If this trend continues in the coming weeks, it could establish a temporary ceiling for prices.
By contrast, any disruption to global supply or a rebound in demand could quickly reverse the outlook. For now, the balance between high inventories and international risks is keeping oil in an adjustment phase.
Source: OilPrice