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Oil futures rose more than 2% on Wednesday, continuing to rebound from their year-to-date lows hit as global stocks tumbled after a larger-than-expected drop in U.S. crude inventories, but traders remain concerned about possible retaliation. Iran’s attack on Israel.
U.S. commercial crude oil inventories fell by a much larger-than-expected 3.7 million barrels to 429.3 million barrels in the week ended Aug. 2, the sixth consecutive week of declines and about 6% below the five-year average for this time of year, according to the Energy Information Administration.
“The story here is that demand is stronger than people thought. Overall supply is tight“It’s a very positive development,” Price Futures Group analyst Phil Flynn said, according to Reuters.
However, gasoline inventories rose by 1.3 million barrels and distillates increased by 900,000 barrels, according to the EIA, although analysts had expected both figures to fall.
“The drop to multi-month lows led to a big bid in WTI spreads. [but] Gasoline and distillate accumulation [inventories] teeth especially “That’s a reasonable figure given that refinery utilization rates are at 90.5%, compared with 93.8% at the same time last year,” Mizuho analyst Robert Yauger said, according to Dow Jones.
Data from China showed that crude oil imports fell in July compared with the same month a year earlier, supporting the weak demand view. The lowest level since September 2022.
September NYMEX Crude Oil (CL1:COM) contract expires +2.7% October Brent crude oil (CO1:COM) rose to $75.23 a barrel. +2.4% Up to $78.33/barrel.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI)
Donald Trump It fills up quickly If he takes office in November, he plans to increase the U.S. Strategic Petroleum Reserve, which could increase oil demand by hundreds of millions of barrels.
As of July 26, the SPR held 375 million barrels of oil, just over half its capacity and the lowest level since 1983. To bring the stockpile back to roughly the same level as during Trump’s term in office, the U.S. would need to purchase roughly 300 million barrels of crude oil.
In an interview with Fox News, Trump said Biden is “using strategic reserves that are meant for the military, for war and for very important purposes, to keep gas prices down in an election year.”
The United States has taken advantage of a lull in oil prices in recent weeks to replenish its SPR, with the Department of Energy announcing purchases of an additional 4.65 million barrels last week.
