WTI futures drop sharply after DoE inventory numbers
Government figures revealed that US oil and product stockpiles jumped last week, wrong-footing traders who had been expecting a drop in crude inventories.
Commercial crude oil inventories in the States grew by 3.3m barrels during the week ending on 2 June (consensus: -3.5m) to reach 513.2m barrels, according to the Energy Information Administration, the US Department of Energy's statistical arm.
In parallel, gasoline inventories jumped by 3.3m barrels (consensus: 0.6m), while those of distillates did so by 4.4m barrels.
Helping to lead markets astray, figures published by the American Petroleum Institute the day before had revealed a 4.6m drop in crude oil inventories, alongside builds for gasoline and distillates.
Crude oil imports meanwhile rose by 356,000 barrels per day versus the prior week, the EIA said, with refineries running at 94.1% of their operating capacity.
Domestic crude oil production in the States declined by 24,000 barrels per day last week.
As of 1810 BST, front month West Texas Intermediate crude oil futures were down by 5.1% to $45.85 per barrel on the ICE.
Commenting on the data, Thomas Pugh at Capital Economics pointed out a 1.7m barrel draw from the Strategic Petroleum Reserve, which in his opinion offset some of the impact from rising commercial inventories.
Pugh added: "The slump in gasoline consumption and refinery inputs also added to the bearish sentiment. However, we think these are likely to be temporary blips and expect stocks to resume falling over the rest of the summer."