With traders expecting a drop Crude inventories in the latest week, moments ago the DOE surprise the oil market when, in an echo of last night’s API report, it said that crude stocks actually grew by an unexpectedly large 4.345MM barrels, just shy of the highest weekly build of 2022 (it rose 4.5mm in the week of Feb 18), and printed far higher than the expected -1.8MM drop. It was not immediately clear how such a large crude build was possible unless demand destruction has already struck.
Additionally, the DOE also reported the following:
- Gasoline -3,615k vs est. -1,462k
- Distillates +332k vs est. -1,759k
- Cushing crude +1,786k
- Refinery utilization +1.1ppt vs est. +0.4ppt
- Crude production unchanged
The report was published just minutes after the FT reported that Ukraine and Russia are working on a peace plan, which helped send oil down by $3 from near session highs. The double whammy of the unexpectedly high inventory build was sufficient to push WTI to session lows of $94.6 with Brent following suit.