By Barani Krishnan
Investment.com – The bullish narrative in US oil isn’t quite as optimistic as the oil bulls would like it to be.
The US and both fell last week, shuffling bullish expectations. The problem is with, soaring for the second straight week, in the biggest consecutive build of its kind since January.
New York’s most actively traded West Texas Intermediate crude contract settled below the key $100 per barrel level on Wednesday after the latest U.S. Energy Information Administration inventory report showed. “Demand destruction” for gasoline – an unthinkable phrase for the bulls in the game.
Since plunging last Thursday to a near five-month low of $90.58, WTI has struggled to return to triple-digit prices unequivocally. The past three sessions have seen it head towards last week’s lows in Asian trading, before being pulled back higher during the US session. It’s Wednesday’s trading session, it looks set to go that way before plunging deeper into the final hour.
fell 86 cents, or 0.9%, at $99.88 a barrel, following an intraday low of $98.19.
Prices traded in London fell 43 cents, or 0.4%, at $106.92 a barrel, after a session as low as $103.60. The global crude benchmark hit a five-month low of $95.42 on Thursday.
Gasoline stocks rose by about 3.5 million barrels in the week ended July 15, after rising 5.8 million barrels in the week to July 8, the EIA said in its Weekly Oil Status Report. Industry analysts had predicted a 71,000-barrel gain last week and a 357,000-barrel drop last week.
It was the largest stockpiling increase of gasoline – the main auto fuel in the United States – since the weeks of January 7 and January 14, in which inventories rose by nearly 14 million barrels.
The increase comes as the average price of gasoline at U.S. pumps held steady near $4.50 per gallon, a level considered high despite peaking at a record $5.01 per gallon in mid-January. June. Before this year, gas had rarely cost more than $3.50 a gallon since 2014, even during peak summer driving times like now.
Economists say energy prices are now among the top three drivers, having been at a 40-year high since last year.
EIA data showed gasoline pump demand last week at 8.5 million barrels, down from 9.3 million the previous week.
“It’s only been a second straight week of gasoline stockpiles but it’s the clearest sign yet of burning demand,” said John Kilduff, founding partner at energy hedge fund Again Capital. “American drivers are doing all they can to cut their gas bills like driving less, accelerating more easily, cutting out unnecessary trips and using the most fuel-efficient vehicle of their time. garage or even public transport, when possible.”
EIA data also showed that stocks of distillates – the oil variant needed to produce the diesel needed for trucks, buses and trains, as well as jet fuel – have fallen by 1. .3 million barrels last week. Analysts forecast distillate production of 1.17 million for the previous week, after rising 2.67 million the previous week.
Better distillate consumption suggests that many Americans may actually be relying on public transportation instead of cars amid high gas prices.
Meanwhile, crude stockpiles last week fell 446,000 barrels from an expected increase of 1.36 million. Crude stockpiles rose by nearly 11.5 million barrels in the previous two weeks.
Crude inventories fell as the EIA reported a relatively smaller drop of 5 million barrels of crude last week from the Strategic Petroleum Reserve. Weekly declines from the national oil stockpiles previously ranged from 6 million to 7 million barrels over the past month.
The Biden administration has relied heavily on reserves to replenish crude supplies to the market in order to reduce the global oil supply deficit as a result of the Ukraine conflict and sanctions on exporters. Russian major energy.