Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Crude Oil Weakens; U.S. Gasoline Stocks, Talk of OPEC Supply Weigh

Published 15/07/2021, 15:02
Updated 15/07/2021, 15:02
© Reuters

© Reuters

By Peter Nurse   

Investing.com -- Crude oil prices slumped Thursday, weighed by the combination of a surprise rise in U.S. gasoline stocks and talk that OPEC+ is nearing a deal to increase supply onto the global market.

By 9:45 AM ET (1345 GMT), U.S. crude futures traded 1.1% lower at $72.36 a barrel, on course for its worst week in four months, while the Brent contract fell 1.2% to $73.84.

U.S. Gasoline RBOB Futures were down 1.2% at $2.2652 a gallon.

The Energy Information Administration reported late Wednesday a seventh consecutive weekly draw in U.S. crude stockpiles. However, product inventories saw builds, with gasoline and distillate fuel oil inventories increasing, which came as a surprise during the peak driving season.

“If we look at total stocks (oil and products), inventories actually increased by 2.49MMbbls,” said ING analysts, in a note. “The data also showed a large reduction in implied demand over the week.”

Adding to the market’s woes were reports suggesting Saudi Arabia and the United Arab Emirates were close to resolving the standoff that has prevented a group of top producers, known as OPEC+, from adding the supplementary output to the global market needed to balance a tightening market. 

“When talks initially broke down, this was because the UAE wanted its baseline used for production cuts increased. Reports suggest that they have got their way, with their baseline increased from around 3.2MMbbls/d to 3.65MMbbls/d,” ING added.

The International Energy Agency on Tuesday warned that the market would tighten significantly if the alliance didn’t add more barrels.

The Organization of the Petroleum Exporting Countries released its latest monthly report earlier Thursday, and expects global oil demand to reach pre-pandemic levels during 2022.

The group estimated that global oil demand would reach 99.86 million barrels a day next year, up by 3.28 million b/d from this year, and just short of the 99.97mn b/d level in 2019. That said, it also sees global oil demand exceeding the 100 million b/d mark in the second half of next year.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.