By Orbex
The latest report from the Energy Information Administration highlights the growing supply/demand imbalance affecting the crude oil market.
The EIA report showed that in the week ending March 13th, US crude stores rose by 2 million barrels.
This latest increase takes the total inventory level to 453.7 million barrels, the highest level since July 2019.
While the 2 million barrel increase was a little less than the 3.3 million increase forecast, it was enough to add further pressure for crude prices.
Despite the continued build in headline crude inventories, both gasoline and distillate levels have fallen again over the last week.
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The EIA reported that gasoline stores were down by 6.2 million barrels over the week. This takes the total inventory level to 240.82 million barrels. The latest drop was far lower than the 2.9 million barrel decrease the market was looking for.
Distillate stockpiles were also lower last week falling by 2.9 million barrels. This latest drop, again lower than the 2 million barrel drop forecast, takes distillate stockpile levels to 125.12 million barrels.
In terms of regional levels, the report showed that crude levels at the Cushing delivery hub in Oklahoma were higher by 563k barrels over the week.
Refinery crude runs were higher by 118k barrels over the week. However, refinery utilization rates remained unchanged.
Net US crude imports were also lower over the week.
Imports fell by 841k barrels as the US once again reported a net exporter position over the week. This has now been the case for the last five weeks, marking the longest run on record.
Crude prices have been under relentless pressure amidst the ongoing rout in asset prices. Meanwhile, the coronavirus outbreak continues to dampen demand.
Nationwide lockdowns have been put in place around the globe and heavy travel restrictions have significantly weakened airline demand for fuel. As a result, crude prices have been pushing lower into the 20s.
Looking at the monthly chart for perspective, the sell-off in crude has now seen price breaking down through the 2016 lows of 26 to trade 22 last.
Price is now well on its way to testing the 2001 lows of 17.12. Unless this level holds as support, price will very quickly be looking at the 1998 lows of 10.72.
To the topside, any correction higher will need to break back above the 42.39 level to alleviate near term bearish pressure.
By Orbex
