Developed nations' total oil stockpiles fell in August for the first time since March, according to the International Energy Agency, but analysts say a continued buildup of refined fuels remains a barrier to reversing a two-year crude glut.
The IEA reported Tuesday that overall oil and product inventories in OECD countries fell by 10 million barrels, driven by a 22 million barrel decline in crude stocks in the United States, Japan and South Korea. But an 18.7-million barrel increase in petroleum products offset the decline.
Those products included middle distillates like jet fuel and heating kerosene, fuel oil and particularly U.S. propane. At 3.092 billion barrels, total oil stockpiles in August were just below a record of 3.111 billion barrels in July.
The rise in petroleum product stockpiles reinforced fears that demand for the "feedstock" crude that's refined into petroleum products will eventually fall as the world works through the fuels backlog, potentially dragging down oil prices anew.
"I think that really is the big worry here. Even though crude stocks drew, we saw products increase, and we have such a strong overhang of products," said Matt Smith, director of commodity research at cargo-tracking firm ClipperData.