Crude Oil sells a glut that never left the dock
The largest weekly build in American Crude Oil inventories in three and a half years landed on Wednesday into a market that two forecasting agencies spent the same morning describing as physically short, and the barrel has been selling since.
A sudden surge in U.S. crude oil inventories has left the market in a perplexing situation. The largest weekly build in three and a half years left a market that forecasters described as physically short, causing the barrel to sell ever since. West Texas Intermediate (WTI) closed just above $80.00, down 1.69%, after fluctuating between $82.00 and $79.50.
The discrepancy between the build and the shortage lies in the location of the barrels. Commercial stocks rose to 424.4 million barrels, still around 2% beneath the five-year average. Exports plummeted while imports surged by 1.14 million barrels a day. Refineries operated at 96.2% of their capacity, and there was no evidence of reduced American consumption.
The refined product data did not support any of these observations, indicating a glut rather than a bottleneck. Gasoline inventories fell to 208.7 million barrels and were 6% under the five-year average, distillates slipped to 107.1 million and were roughly 12% under their average. OPEC also trimmed its 2026 growth estimate, expecting a decline due to price and a blocked waterway, rather than a soft economy.
Despite production recovery, the supply gap remains significant. The market's response to the situation has been muted, with the daily chart showing a compression rather than a break. The only notable entry this week was on Monday, with a potential upside target at $82.50.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
