Prices for benchmark crude oil continue to rise on the back of data showing a decline in US fuel stocks for the third week in a row.
Such a long period of decline was last seen in September last year.
The drop in oil reserves exceeded market expectations.
In addition, recent statements by representatives of the Federal Reserve System have increased expectations that the US central bank will cut its base rate in September. This will boost economic growth and, accordingly, lead to an increase in demand for energy resources, Trading Economics writes.
Quotations of September futures for Brent on the London ICE Futures exchange by 8:05 a.m. rose by $0.37 (0.4%) to $85.45. On Wednesday, these contracts rose by $1.35 (1.6%) to $85.08 per barrel.
Prices for August futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) on Thursday morning increased by $0.57 (0.7%) to $83.42 per barrel.
At the end of the previous session, these contracts rose by $2.09 (2.6%) and ended trading at $82.85 per barrel.
Commercial oil inventories in the United States last week decreased by 4.87 million barrels, the country’s Energy Ministry reported.
Gasoline reserves increased by 3.33 million barrels, distillate reserves – by 3.45 million barrels.
Experts had expected an increase in oil reserves by 0.8 million barrels, as well as a decrease in gasoline reserves by 1.7 million barrels and distillate reserves by 0.5 million barrels, according to Trading Economics.
Analysts surveyed by S&P Global Commodity Insights had forecast an increase in oil reserves by 0.54 million barrels and a decrease in gasoline and distillate reserves by 0.7 million barrels and 0.59 million barrels, respectively.
Benchmark oil prices are falling on Tuesday morning after a moderate decline the day before.
The cost of September futures for Brent on the London ICE Futures exchange as of 8:03 a.m. is $84.59 per barrel, which is $0.26 (0.31%) lower than at the close of the previous trading. The day before, these contracts fell in price by $0.18 (0.2%) to $84.85 per barrel.
August futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.31 (0.38%) to $81.60. On Monday, the contract fell by $0.3 (0.4%) to $81.91 per barrel.
A negative factor for the oil market was the weak statistics from China, which indicated a slowdown in China’s GDP growth in the second quarter to 4.7% in annual terms from 5.3% in the previous quarter.
“The growth of the Chinese economy is directly linked to global economic activity and fuel demand,” wrote StoneX analysts led by Alex Hodes.
Traders were also assessing the news of the assassination attempt on Donald Trump, which resulted in the politician being lightly wounded. According to analysts, this event increases his chances of winning the US presidential election in November.
“The Trump government has prioritized energy independence and economic growth over environmental regulation in the past,” said Nigel Green, CEO of deVere Group. – “If he becomes president again, we expect him to take the same approach, which will be positive for the energy sector and especially for fossil fuels.
Oil continues to fall in price on Tuesday.
Traders are assessing the effects of Hurricane Beryl, which hit the Texas coast on Monday, and are following the negotiations between Israel and Hamas.
Expectations that the parties will agree on a ceasefire with the mediation of Qatar and Egypt are putting some pressure on the oil market, according to a review by the StoneX team of experts, as quoted by Market Watch. Analysts, however, note that “such negotiations have failed many times before.”
The cost of September futures for Brent on the London ICE Futures exchange as of 8:15 a.m. is $85.54 per barrel, which is $0.21 (0.24%) lower than at the close of the previous trading. On Monday, these contracts fell by $0.79 (0.9%) to $85.75 per barrel.
August futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.22 (0.27%) to $82.11 per barrel by this time. As a result of the previous session, the value of these contracts decreased by $0.83 (1%) to $82.33 per barrel.
The effects of Hurricane Beryl were less severe than expected. However, some energy infrastructure facilities in Texas are still out of service due to the hurricane’s effects.
Traders’ attention this week is focused on the monthly reviews of the oil market by OPEC and the International Energy Agency.
In addition, the market is waiting for statements from Federal Reserve Chairman Jerome Powell, who will present a semi-annual report on monetary policy to the US Senate Banking Committee on Tuesday.
Benchmark oil prices are rising on Monday morning.
Quotes for September futures for Brent on the London ICE Futures exchange by 8:14 a.m. increased by $0.38 (0.45%) to $85.38 per barrel. On Friday, their price rose by $0.26 (0.3%) to reach $85 per barrel. August contracts, which expired at the end of the previous trading, rose in price by $0.02 to $86.41 per barrel.
August futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) in the morning added $0.36 (0.44) to $81.9. On Friday, the value of these contracts decreased by $0.2 (0.2%) and amounted to $81.54 per barrel at the close of the session.
In June, Brent rose in price by 1.2%, WTI – by 5.9%.
The hurricane season has begun in the Atlantic, and traders are watching to see how it might affect oil trade in the US.
As Hurricane Beryl approaches the Caribbean from the southeast, it has strengthened to a category four, the Associated Press reports.
“This is a very dangerous situation,” the US National Hurricane Center (NRC) said. According to its forecasts, Beryl will cause a storm surge and pose a threat to life due to wind speed.
Oil prices are falling slightly on Friday after rising in the previous session due to data on the decline in US stocks.
Commercial oil inventories in the United States last week decreased by 2.55 million barrels, the country’s Energy Ministry said on Thursday. Commercial gasoline stocks fell by 2.28 million barrels, distillate stocks by 1.73 million barrels.
The cost of August futures for Brent on the London ICE Futures exchange as of 8:20 a.m. is $85.63 per barrel, which is $0.08 (0.09%) lower than at the close of the previous trading. On Thursday, these contracts rose in price by $0.64 (0.8%) to $85.71 per barrel, the highest since April 30.
Futures for WTI for August in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.06 (0.07%) to $81.23 per barrel by this time. As a result of the previous session, the value of these contracts increased by $0.58 (0.7%) to $81.29 per barrel.
Since the beginning of this week, both Brent and WTI have risen in price by about 4%.
The oil market is supported by signals of growing demand for petroleum products in the country, in addition to data on declining stocks in the United States. According to the American Automobile Association, a record number of Americans will travel this year during the US Independence Day holidays.
“In general, the inventory data shows that the oil market is shrinking,” said Vivek Dhar, an analyst at Commonwealth Bank of Australia, as quoted by Bloomberg. – “The key risk that could lead to a decline in oil prices in the short term is the possibility of a weaker-than-expected increase in oil demand in China.
Oil prices are declining slightly on Tuesday after a 2 percent rise in the previous session amid a general increase in risk appetite in global markets.
The cost of August futures for Brent on the London ICE Futures exchange, as of 7:20 a.m., is $84.12 per barrel, which is $0.13 (0.15%) lower than at the close of the previous trading. On Monday, these contracts rose by $1.63 (2%) to $84.25 per barrel.
Futures for WTI for July in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.16 (0.2%) to $80.17 per barrel. At the end of the previous session, the value of these contracts increased by $1.88 (2.4%) to $80.33 per barrel.
“Since mid-June, oil prices have been steadily rising on the back of US data,” said Fawad Razakzada, StoneX analyst. – “Last week’s market rise can be considered a delayed reaction to the OPEC+ decision to extend the current restrictions on oil production.
“Investors are also expecting fuel demand to increase with the start of the automotive season, which will push oil inventories lower in the coming weeks,” Razakzada said, as quoted by Market Watch.
