Energy: API reports a large build of oil inventory – ING

The oil market is trading with marginal declines this morning as the API numbers released overnight were largely bearish for the oil market. The institute reported that US crude oil inventories increased by 9.04m barrels over the last week, compared to the market expectations of a build of 2.5m barrels. If confirmed by the Energy Information Administration (EIA), this would be the biggest inventory build in a year. On the other hand, API reported large product inventory draws, with gasoline and distillate stocks falling by 2.5m barrels and 0.6m barrels respectively. The more widely followed Energy Information Administration (EIA) report will be released later today, ING's commodity experts Ewa Manthey and Warren Patterson note. 

OPEC to publish its monthly oil market report on Wednesday

"Yesterday, the EIA released its latest Short-Term Energy Outlook, in which it forecasts 2025 US crude oil production to grow slightly by 40k b/d YoY to average a record of 13.59m b/d. Meanwhile, for 2026, the EIA expects a stronger supply growth of a little over 100k b/d YoY, which would see output averaging 13.73m b/d. This ties in with the recovery in drilling activity we have seen in recent weeks. The number of active oil rigs in the US increased by one over the week to 480."

"Recent reports suggest that oil refinery runs in Russia fell in early February as drone attacks by Ukraine curtailed throughput. There are suggestions that refiners processed about 5.1m b/d of crude over the first five days of February, which is 300k b/d below the level seen for most of January. The drone assaults forced Lukoil’s Volgograd refinery to reduce the processing rates by more than half and runs remained halted at Rosneft’s Ryazan facility."

"On the energy calendar for the week, apart from the usual US inventory numbers, OPEC will publish its monthly oil market report tonight. Meanwhile, the IEA will also publish its monthly oil market report tomorrow. The broader markets will also be focused on US CPI data and the final comments from the semi-annual monetary policy testimony scheduled for the week."