Oil falls further after API reports large surprise builds in crude

Crude oil inventories in the United States rose this week by 4.052 million barrels for the week ending May 24, according to The American Petroleum Institute (API), after analysts had forecast a 1.9 million barrel draw.

For the week prior, the API reported a 6.490 million barrel dip in crude inventories.

On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 0.9 million barrels as of May 31. Inventories are now at 340.2 million barrels—the highest level since March of 2023, but still well below the 656 million barrels in inventory in June 2020.

Oil prices were trading down ahead of the API data release on Tuesday—a loss that began on Monday as the market uneasily digested what OPEC+ was serving up with its plan to gradually increase production, while extending its voluntary output cuts for some members into 2025.  

At 4:01 pm ET, Brent crude was trading down $0.82 on the day at $77.54—down roughly $6 per barrel from this time last week. The U.S. benchmark WTI was also trading down on the day at -1.24% to $73.30—also a nearly $6 loss week over week.

Gasoline inventories also rose this week as well, by 4.026 million barrels, after last week’s 452,000 barrel decrease. As of last week, gasoline inventories were about 1% below the five-year average for this time of year, according to the latest EIA data.

Distillate inventories also saw an increase this week, of 1.975 million barrels, on top of last week’s 2.045-million-barrel rise. Distillates were 6% below the five-year average for the week ending May 24, the latest EIA data shows.

Cushing inventories saw rounded out the gains this week, according to API data, rising 983,000 barrels after decreasing by 1.706 million barrels in the previous week.