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US crude oil inventories plummeted due to recovery in gasoline demand, but crude oil prices fell

Oil futures gave up on Wednesday and fell despite data showing an unexpected decline in US crude oil inventories and a further sharp decline in gasoline supply.

The fall in crude oil came as the stock market plummeted, extinguishing Tuesday’s big bounce and impacting demand for other assets perceived as risky.

Price action
What is driving the market?

According to the Energy Information Agency, US crude oil inventories fell 3.4 million barrels, gasoline inventories fell 4.8 million barrels, and distillate supply increased 1.2 million barrels during the week ending May 13. Analysts surveyed by S & P Global Commodity Insight predict that oil inventories will increase by 2.1 million barrels, gasoline will decrease by 100,000 barrels, and distillates will decrease by 1 million barrels.

The American Petroleum Institute, an industry group, reported late Tuesday: US crude oil inventories fell 2.4 million barrels last weekGasoline inventories have fallen by 5.1 million barrels, according to sources. Inventory of distillates increased by 1 million barrels.

“Despite the release of 5 million barrels from SPR, increased production and imports, increased refining activities and crude oil exports have helped pull in (crude) inventory,” Kpler said in the United States. Matt Smith, chief oil analyst on the continent, said. Email.

In the crude oil draw, “Implicit demand exceeded 9, resulting in a significant drop in gasoline inventories. [million barrels a day] The first week of 14. Implicit demand for distillates also showed a slight increase, but inventories still showed a slight increase. “

US stocks Significantly lowerDow Jones Industrial Average
DJIA,
-2.20%

While the S & P 500 is 650 points, or more than 2% tumbling
SPX,
-2.67%

I slid 2%.

According to analysts, the initial rise in oil prices is partly linked to expectations for deregulation of COVID in China, the world’s largest importer of oil. Stephen Innes, managing partner of SPI Asset Management, said in a note to customers that optimism about “much higher oil demand and prices” is detrimental to consumer sentiment but positive to producers. ..

“And at affordable prices for pumps, a by-product of demand that exceeds supply, the federal government is tasked with raising interest rates, at least to ease the demand side of the economy, and eventually filters it into a modest form. It is possible that buyers will not surge during peak driving seasons in the United States, but that demand will be destroyed if buyers are likely to strike. “

UK data On Wednesday, rising energy prices showed that annual consumer prices had risen to their highest level in 40 years.

Saxo Bank’s head of commodity strategy, Ole Hansen, said in a note to customers Wednesday that crude oil has pushed the upper limit of trading scope over the past few weeks.

“In the last few weeks, the focus has shifted from the out-of-range crude oil market to the commodity market, where gasoline, diesel and jet fuel costs, if any, have skyrocketed to levels not seen in years. The combination of refinery maintenance, post-pandemic production capacity declines, and self-sanctions on Russian products all lead to an incredibly tight market, “Hansen said.

US crude oil inventories plummeted due to recovery in gasoline demand, but crude oil prices fell

Source link US crude oil inventories plummeted due to recovery in gasoline demand, but crude oil prices fell

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