Oil falls as US inventory data showed a rise in gasoline

Oil prices decreased on Thursday as inventory data in the United States, the world’s top oil consumer, registered a rise in gasoline stocks that shows weaker-than-anticipated fuel demand at the start of summer.

Brent crude oil futures increased by 18 cents, which equals 0.25%. It traded at $72.40 a barrel, holding just shy of a high unseen since May 2019.

U.S. West Texas Intermediate oil futures soared 11 cents, or 0.16%. It traded at $70.07 a barrel, close to its highest since October 2018.

According to Tamas Varga, an analyst at PVM Oil Associates, the market is recovering impressively from yesterday’s dismal weekly EIA report. Remarkably, the decline in weekly gasoline demand was particularly disappointing.

Varga said it will interesting to see whether the monthly OPEC report due out later will confirm last month’s upbeat demand assessment for the second half of the year. If it does, it should support oil prices.

Varga also added that U.S. inflation data and jobless claims would provide more direction on the health of the world’s largest economy and clues as to whether the Fed might start tapering stimulus.

U.S. crude oil stockpiles that include the Strategic Petroleum Reserve (SPR) dropped for the 11th straight week. The refiners ramped up output. Still, fuel inventories rose sharply due to weak consumer demand.

Crude inventories that exclude the SPR declined by 5.2 million barrels in the week to June 4 to 474 million barrels, the third consecutive weekly fall. However, fuel stocks were up sharply, with product supplied dropping to 17.7 million barrels per day (bpd).

Gold drops as investors awaited U.S. inflation data and ECB meeting

The yellow metal prices dropped on Thursday, pressured by a firm dollar as investors awaited U.S. inflation data to measure the Federal Reserve’s monetary policy stance and European Central Bank meeting.

Spot gold dropped by 0.4% to $1,880.17 per ounce, having earlier hit its lowest level since June 4 at $1,875.89. U.S. gold futures slipped by 0.7% to $1,883.30 per ounce.

According to Lukman Otunuga, a senior research analyst at FXTM, further signs of inflationary pressures could sweeten appetite for gold. However, upside gains may be supported by an appreciating dollar if inflation concerns send U.S. Treasury yields rising.

U.S. weekly jobless claims data, also due on Thursday, will give further cues on labor market recovery in the world’s largest economy.

The U.S. dollar index increased, making gold less appealing for holders of other currencies. Moreover, silver declined by 0.3% to $27.67 per ounce, palladium dipped 0.4% to $2,767.06, while platinum eased 0.9%, to $1,139.76.