All articles tagged with #inventories
The American Petroleum Institute (API) reported a significant draw of 6.490 million barrels in U.S. crude oil inventories for the week ending May 17, contrasting with the previous week's 2.48 million barrel increase. Gasoline inventories also fell by 452,000 barrels, while distillate inventories rose by 2.045 million barrels. Despite these changes, oil prices were trading down due to concerns over weak gasoline demand and economic data.
U.S. crude oil inventories experienced a significant draw of 7.418 million barrels, surpassing analyst predictions, while gasoline and distillate inventories saw substantial builds. Despite the draw in crude oil, overall inventories have built up over 13 million barrels in 2023. The Strategic Petroleum Reserve also increased slightly, and oil prices showed a slight decrease from the previous week. The data suggests a mixed picture for oil supply and demand dynamics.
U.S. crude oil production reached a record high in August, surpassing pre-pandemic levels, with field production reaching 404.6 million barrels, averaging 13.05 million barrels per day. The largest increase in production was seen in PADD 4, while Texas, home to the Permian Basin, also experienced a slight increase. Despite the record-breaking production, crude oil inventories in the U.S. remain close to where they started the year. The number of active drilling rigs in the U.S. is still 350 fewer than pre-pandemic levels.
Despite oil prices nearing $90 a barrel, gas prices in the US are falling due to seasonal factors and lower demand. The national average cost of retail gasoline has decreased by $0.10 per gallon in the past week and is $0.30 lower than last month. The switch to a less expensive winter blend driving fuel and higher inventories compared to last year are contributing to the decline. Gas prices are expected to continue dropping until the end of the year, unless the ongoing Israel-Hamas war expands to include oil-producing nations in the region.
The oil market is at risk of a major shock as high interest rates lead to a decrease in oil inventories, according to analyst Amrita Sen. The cost of storage has become expensive, forcing traders to dump inventories. This trend, caused by tightening monetary policy, is expected to result in the lowest commercial supplies in over a decade. Sen warns that the market is vulnerable to shocks and unexpected OPEC+ policy moves by the end of the year.
Oil prices stabilized as the US Federal Reserve hinted at a pause in interest rate hikes and the US House of Representatives passed a bill suspending the government's debt ceiling. However, rising inventories in the US, the world's biggest oil consumer, and mixed demand indications from China have weighed on the market. The OPEC+ producer group's June 4 meeting is also in focus, with uncertainty over whether further production cuts are likely.
Oil prices rose as estimates of continued drawdowns in US inventories and the International Energy Agency's bullish outlook for demand gave oil markets a boost. However, concerns over the health of the US economy and China's weaker-than-expected recovery are still weighing on oil markets. The IEA upgraded its global oil demand growth estimate after finding that China's recovery continues to exceed expectations, and that China's oil demand hit a record high of 16 million bpd in March 2023.
Oil prices dipped as traders await the release of April inflation data, which will give an idea about further interest rate hikes from the Fed. Despite economic concerns, some analysts have begun to call the bottom for oil prices as inventories continue to decline. The oil market is bracing up for even more volatility as traders rush to the exits amid continued fears for the state of the U.S. economy and global inflation trends.
Crude oil inventories in the US rose by 3.262 million barrels, while gasoline and distillate inventories fell. US crude oil production remained steady at 12.2 million bpd. Oil prices traded up on Tuesday after significant losses in the previous week. Gasoline demand was up 7% this past Sunday and Monday compared to the relative four-week averages, and the highest levels since September 25, 2022.
Oil prices have fallen significantly in recent days, with WTI crude oil dropping below $67 a barrel, its lowest price since November 2021, due to fears over the banking system and a steady build in inventories. Data from the American Petroleum Institute showed inventories rose for the 10th-straight week, while the Energy Information Administration's weekly petroleum report showed a build in crude oil inventories last week. The Biden administration's decision to approve a drilling project in Alaska has also raised concerns about more supply coming onto a market already not facing a shortage of oil.