API reports surprisingly strong increase of US crude oil stocks

The fall in price overnight is no doubt attributable in part to the API's inventory report, which showed an unexpectedly sharp 7.6 million barrel rise in US crude oil stocks last week. This reversed the nearly equally large inventory reduction of the previous week. 

The US Department of Energy (DOE) will be publishing the official inventory data this afternoon. The market's previous expectation of an inventory build of a mere 400,000 barrels is likely to be upwardly revised in the wake of the API figures. 

"It will also be interesting to see whether the DOE's estimate of weekly oil production takes the latest downward revision of production figures up to and including June into account. If so, a significant reduction in crude oil production would be on the cards, which in turn might lend support to prices despite a more pronounced inventory build", says Commerzbank.