Breaking news: Big inventory build sees Oil pullback from 6-week high

The weekly crude oil inventory release has shown a huge increase and come in far higher than expected, sending the price of brent back down below the $63 mark after the market earlier hit a 6-week high. The report came in as follows:

• Crude oil inventories: +7.9M vs +2.0M exp. API: +4.3M

• Gasoline: -2.8M vs -2.0M exp. API: -4.0M

• Distillates: -0.6M vs -1.3M exp. API: -1.6M

The headline reading not only was well above the consensus forecast but also comfortably higher than last night’s API reading. This is the 7th time in the past 8 weeks that the print has come in higher than expected. However, the drawdown in gasoline and distillates does take some of the negative aspect away from this report.

Oil has dropped by around 30 cents since the release but the reaction hasn’t been that big considering the large headline build - possibly due to the components being less bearish. The market earlier made a 6-week high of 63.28. Source: xStation

• In other Oil news there are suggestions doing the rounds that Saudi Arabia will push OPEC countries to make deeper oil-production cuts by pressing members ahead of the massive initial public offering of its state run oil company Aramco. “They will be under enormous pressure to succeed [in pushing prices up] just before the IPO,” which is taking place six days later, one Saudi oil adviser said.

• Elsewhere, OPEC has admitted that demand for its oil over the next few years could be drastically weaker that it previously though, due to a combination of a weakening economy, rising supply elsewhere and pressure from climate activists.