WTI, Brent Crude Prices Climb Over 1.6% Despite Surprise U.S. Inventory Build

Front-month oil prices posted solid gains on Tuesday, with West Texas Intermediate (WTI) crude settling at $83.46 per barrel, a rise of $1.33 or 1.62%. The global Brent benchmark climbed to $89.20, up $1.48 or 1.69%. The price for Bakken crude at the Clearbrook, Minnesota, hub was discounted by $3.42 per barrel versus WTI.

The gains came despite a bearish weekly inventory report from the American Petroleum Institute (API). According to OilPrice.com, the API estimated U.S. crude oil inventories rose by 9.072 million barrels for the week ending August 7, a stark contrast to analyst expectations for a 500,000-barrel draw. This follows a build of 2.69 million barrels the prior week.

Market analysts pointed to sustained geopolitical risk as a primary driver overriding the inventory data. As reported by Rigzone, ongoing tensions surrounding the Strait of Hormuz have supported prices. OilPrice.com noted Brent crude has gained nearly $10 per barrel week-over-week as Iran maintained its terms for allowing unobstructed traffic through the critical chokepoint.

Underlying fuel demand appears robust, limiting the bearish impact of the crude build. The API reported gasoline inventories fell by 1.531 million barrels last week, while distillate stocks drew down by 596,000 barrels. Both fuel categories were already below their five-year averages heading into the period, according to prior U.S. Energy Information Administration (EIA) data cited by OilPrice.com.

For Bakken operators, the stable differential near -$3.42 indicates strong market access for North Dakota crude despite rising inventories at the Cushing, Oklahoma, storage hub, which the API reported increased by 1.571 million barrels. The outright WTI price above $83 provides healthy margins, supported by U.S. production that reached 13.804 million barrels per day for the week ending July 31, up slightly from the week prior.

The Strategic Petroleum Reserve (SPR) saw another draw of 6.1 million barrels, bringing the total to 298.7 million, a level that approaches what is considered the operational minimum, according to the source. This ongoing depletion continues to remove a source of supply from the market.