Crude Oil Prices Plummet Amid Inventory Concerns and OPEC Output Cut Review

Crude oil prices took a sharp dive on Tuesday, as traders grew concerned about rising inventory levels and potential changes to OPEC's March output cut agreement. The American Petroleum Institute (API) reported a buildup of 3.929 million barrels of crude oil stocks for the week ended May 14, exacerbating market worries. As a result, June light, sweet crude on the New York Mercantile Exchange (Nymex) traded below $17/bbl before settling at $17.11/bbl, down 83 cents.

Key Takeaways:

Crude oil stocks increased by 3.929 million barrels, contrary to market expectations of a drawdown.
Gasoline stocks fell by 4.282 million barrels, while distillate stocks rose by 2.095 million barrels.
The refinery utilization rate was up 0.3 percentage point to 96.6% of capacity, a sign of increased refining activity.
OPEC members suggested reviewing the March output cut agreement, sparking concerns about potential changes to production levels.
Nymex products, such as June gasoline and heating oil, also took a hit, with prices falling below 50 cents per gallon for the first time since March 25.
Natural gas spot prices remained flat in Louisiana and South Texas, while the June Nymex Henry Hub contract plummeted 8.1 cents to $2.262/MMBtu.

Statistics:

Crude oil stocks increased by 3.929 million barrels for the week ended May 14.
Gasoline stocks fell by 4.282 million barrels.
Distillate stocks rose by 2.095 million barrels.
Refinery utilization rate was up 0.3 percentage point to 96.6% of capacity.
Nymex June gasoline fell by 2.02 cents to 49.04 cents per gallon.
Natural gas spot prices remained flat in Louisiana and South Texas.
June Nymex Henry Hub contract plummeted 8.1 cents to $2.262/MMBtu.

Sources:

Alexander Brideau, Bloomberg, "Crude falls to lowest in four weeks as traders fret over OPEC and inventory reports."
American Petroleum Institute (API), "Weekly Petroleum Status Report," week ending May 14.