Crude futures traded lower on Wednesday, with the U.S. benchmark contract at risk of snapping a five-session streak, pressured by concerns over tightening oil-storage capacity even as weekly crude inventories rose less than expected and domestic production declined.
The build in weekly U.S. crude inventories reported by the Energy Information Administration was smaller than anticipated, while the Energy Department continued to buy oil for the Strategic Petroleum Reserve and “at a faster pace week-over-week,” said Tyler Richey, co-editor at Sevens Report Research. The EIA reported a rise of 1.7 million barrels in the SPR to 637.8 million barrels last week.
“Those figures caused a knee-jerk rally when the number hit, but an unexpectedly large build in distillate stocks offset a modest draw in gasoline, which triggered a wave of profit taking across the energy space after a massive, more than 100% rally in WTI over the last week,” Richey told MarketWatch.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 8.4 million barrels for the week ended May 1, according to sources. The API data also reportedly showed gasoline stockpiles down by 2.2 million barrels, while distillate inventories climbed by 6.1 million barrels. Inventory data from the Energy Information Administration will be released Wednesday.