US crude oil stocks posted an increase of 0.5 MMBbl. Gasoline and distillate inventories decreased 2.7 MMBbl and 2.1 MMBbl, respectively. Yesterday afternoon, API reported a crude oil build of 1.3 MMBbl alongside a gasoline build of 74 MBbl and a distillate draw of 0.71 MMBbl. Analysts were expecting a larger crude oil build of 2.5 MMBbl. Total petroleum inventories posted a decrease of 2.1 MMBbl.
US crude oil production remain unchanged last week, per EIA. Crude oil imports were down 0.33 MMBbl/d last week, to an average of 6.2 MMBbl/d. Refinery inputs averaged 16.0 MMBbl/d (0.2 MMBbl/d less than last week’s average).
WTI for April delivery settled at $49.90/Bbl yesterday, down $1.53/Bbl from the day before and $3.48/Bbl below last Friday’s close. Early morning trading on Wednesday brought front-month WTI futures to $49.44/Bbl, the lowest in over a year. In a striking reversal of the gains made in the past two weeks, crude oil futures have been under pressure due to growing concerns about the international spread of COVID-19. Cases of the disease have been identified in over 40 countries worldwide and news of growing outbreaks in South Korea, Italy, and Iran has sent financial markets tumbling in recent days. Physical oil markets have already been affected by weaker demand, but until this point market weakness had been centered mainly on China. In view of the diminishing outlook for global demand growth this year, OPEC and allied non-OPEC countries have been slow to come to a decision about whether to deepen existing production cuts. Joint OPEC/non-OPEC ministerial meetings are planned to take place in Vienna on March 5-6. In the meantime, efforts towards establishing a ceasefire in Libya appear to have broken down. The conflict has kept nearly 1 MMBbl/d of supply off the market since January, partially offsetting the impact of sharply lower demand since the end of last year.