Oil inventories fell by 8.0 million barrels

Crude stockpiles in the United States decreased last week. Still, gasoline inventories reversed a five-week gain, indicating underlying resilience in the demand forecast at a time when supply uncertainty remains following the bungled OPEC+ summit.

The Benchmark

The benchmark for US crude prices, West Texas Intermediate, fell 1.59 % to $72.20 a barrel on the news, after settling down $1.17 to $72.20 a barrel.

For the week ending July 1, crude stocks in the United States dropped by 8.0 million barrels. That compares to the previous week’s draw of 8.2 million barrels reported by the API.

According to the API, gasoline stockpiles declined by around 2.7 million barrels last week, compared to a 1.3 million build the previous week. Distillate stocks rose by roughly 1.1 million barrels. The official government inventory report, which is due Wednesday, is expected to reveal that weekly oil supplies in the United States fell by roughly 4.0 million barrels last week.

Opec +

Three OPEC+ sources stated on Wednesday that Russia is attempting to mediate between Saudi Arabia and the UAE to help reach an agreement to increase oil output. Concerns over the pandemic also pushed on prices. Japan, the world’s fourth-largest oil user, threatened to declare a state of emergency in the Tokyo area. South Korea reported the highest daily COVID-19 cases on record. Prices received some support from a significant decline in US oil stocks.

According to two market sources using American Petroleum Institute estimates, oil stocks in the world’s largest oil user decreased by 8 million barrels in the week ending July 2.

Government inventory data is due on Thursday, a day later than usual. This is due to the Fourth of July vacation in the United States on Monday.

Oil production decreased in the United States projected to slow this year. The EIA is predicting that output would be 11.10 million BPD in 2021, up from a prior projection.