Crude Oil Inventory Up Due to Over-Importing?

[Toranaga + 49]

Crude oil inventories up by 9.9 million barrels this week (May 1, data for week ended April 26). Let's go back to last week (April 24, data for week ended April 19) to frame the question. Last week, inventories were up by 5.5 million barrels. Imports were up by 1,157,000 barrels from the previous week. I thought at the time, perhaps it is a fluke, market participants over imported, and will correct. This week, oil imports are up by 265,000 barrels.  We are importing 6.8 million barrels a day. All of the inventory build could be due to over-importing. But market participants should not be making prolonged mistakes in their decisions to purchase imported oil.  [Edit:  (1,157,000 + 265,000) x 7 = 9,954,000.  So the entire inventory build seems to be due to an increase in imports in the last two weeks. WTH!?]

One possibility is that we are importing certain grades needed to blend with the domestically produced oil. 

A second possibility is that it is a pipeline/transport problem: we can't get the domestically produced oil to certain big refineries so we continue to import while the domestically produced oil is building up in storage.

Will be grateful for responses from knowledgeable folks!

  

 

 

On the EIA website, I found this tool for breaking down oil imports by type and recipient area of country, but it only goes up to February of this year: https://www.eia.gov/petroleum/imports/browser/#/?e=201902&f=m&g=v&gg=t&s=201501&v=u&vs=PET_IMPORTS.WORLD-US-ALL.M

 

Edited May 1, 2019 by Toranaga

[Douglas Buckland + 6,308]

I just read an article where the API announced another 'surprise' crude oil build for last week.

Every week we seem to get a new 'surprise'. Maybe the models being used need to be thrown out if they are consistently inaccurate.

[Jan van Eck + 7,558]

A third possibility is that oil intended for Chinese buyers is not moving due to reluctance of Chinese buyers to engage with US sellers while trade disputes continue, for fear of angering Communist Party elements in Beijing.  Getting on the bad side of those guys is always hazardous to one's health. Just saying.