Crude futures rose on Wednesday after U.S. inventories fell more than expected, amid light trading ahead of the U.S. Independence Day holiday.
The U.S. Energy Information Administration’s weekly report showed an overall decrease in crude oil and refined product inventories, with crude oil Inventories unexpectedly fell by 12.2 million barrels, with gasoline inventories falling by 2.2 million barrels and distillate supplies falling by 1.5 million barrels.
Crude oil supplies are 4% below the seasonal average, gasoline inventories are 1% below average, and distillate inventories are 10% below normal levels for this time of year.
The EIA also reported an increase in implied demand for gasoline and distillates, with gasoline product supply increasing by nearly 500,000 barrels per day to 9.424 million barrels per day, and distillate supply increasing by nearly 200,000 barrels per day to 3.715 million barrels per day.
According to Reuters, Kpler analyst Matt Smith said in response to these data, “Strong exports, a small decline in imports and a rebound in refinery operations combined to reduce crude oil inventories by 12 million barrels. “
Strong demand data is also expected next week, as today marks the start of the extended holiday weekend, with AAA forecasting a record 60.6 million car trips.
Front-month Nymex Crude Oil (CL1:COM) for August delivery has ended +1.3% to US$83.88/barrel, the highest settlement price since April 16, and the recent September Brent crude oil (CO1:COM) also closed +1.3% to US$87.34/barrel, the highest level since April 30.
Meanwhile, front-month August Nymex Natural Gas (NG1:COM) fell for the seventh consecutive trading day, -0.7% to $2.418/MMBtu, the lowest settlement price since May 15.
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Energy Aspects said oil supplies have also tightened: “OPEC+ exports, led by the Gulf states and Iraq, fell sharply in June, partly due to summer crude burning due to an ongoing heat wave in the Middle East”.
But the threat from Hurricane Beryl appears to have eased, with recent forecasts showing the hurricane could kill most offshore rigs in the Gulf of Mexico based on its current forecast path.