Crude stocks fall after US refineries ramp up processing and as petrol inventories slip, signalling stronger demand
11 July 2024 - 09:45
byArathy Somasekhar
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Oil prices gained on Thursday as crude stocks fell after US refineries ramped up processing and as petrol inventories eased, signalling stronger demand.
Brent futures rose 62c, or 0.73% to $85.70 a barrel by 6.20am GMT. US West Texas Intermediate (WTI) crude rose 60c, or 0.73%, to $82.70 a barrel.
“The bounce back is largely due to the continued drawdowns in US inventories as reported by the EIA,” DBS bank energy sector team lead Suvro Sarkar told Reuters, referring to the Energy Information Administration.
US crude inventories fell by 3.4-million barrels to 445.1-million barrels in the week ended July 5, far exceeding analysts’ expectations in a Reuters poll for a 1.3-million barrel draw.
Petrol stocks fell by 2-million barrels to 229.7-million barrels, much bigger than the 600,000-barrel draw analysts expected during the US Fourth of July holiday week.
Oil cartel Opec also stuck to its forecast for relatively strong growth in global oil demand in 2024 and next year, saying on Wednesday that resilient economic growth and air travel would support fuel use in the summer months.
“There is likely to be more bullish factors than bearish, supporting oil prices in the interim,” Sarkar said.
Gains were, however, capped as supply disruptions at refineries and offshore production facilities from hurricane Beryl were minimal.
Meanwhile, US inflation data due this week include the consumer price index (CPI) on Thursday and the producer price index (PPI) report on Friday, both of which could set the tone for the market.
Expectations of a 25 basis point rate cut by September ticked up to 74% from about 70% on Tuesday and 45% a month ago, according to CME’s FedWatch.
Lower interest rates decrease the cost of borrowing, which can boost economic activity and oil demand.
Federal Reserve chair Jerome Powell said on Wednesday the US central bank will make interest rate decisions “when and as” they are needed, pushing back on a suggestion that a September rate cut could be seen as a political act ahead of the fall presidential election.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Easing petrol stocks lifts oil
Crude stocks fall after US refineries ramp up processing and as petrol inventories slip, signalling stronger demand
Oil prices gained on Thursday as crude stocks fell after US refineries ramped up processing and as petrol inventories eased, signalling stronger demand.
Brent futures rose 62c, or 0.73% to $85.70 a barrel by 6.20am GMT. US West Texas Intermediate (WTI) crude rose 60c, or 0.73%, to $82.70 a barrel.
“The bounce back is largely due to the continued drawdowns in US inventories as reported by the EIA,” DBS bank energy sector team lead Suvro Sarkar told Reuters, referring to the Energy Information Administration.
US crude inventories fell by 3.4-million barrels to 445.1-million barrels in the week ended July 5, far exceeding analysts’ expectations in a Reuters poll for a 1.3-million barrel draw.
Petrol stocks fell by 2-million barrels to 229.7-million barrels, much bigger than the 600,000-barrel draw analysts expected during the US Fourth of July holiday week.
Oil cartel Opec also stuck to its forecast for relatively strong growth in global oil demand in 2024 and next year, saying on Wednesday that resilient economic growth and air travel would support fuel use in the summer months.
“There is likely to be more bullish factors than bearish, supporting oil prices in the interim,” Sarkar said.
Gains were, however, capped as supply disruptions at refineries and offshore production facilities from hurricane Beryl were minimal.
Meanwhile, US inflation data due this week include the consumer price index (CPI) on Thursday and the producer price index (PPI) report on Friday, both of which could set the tone for the market.
Expectations of a 25 basis point rate cut by September ticked up to 74% from about 70% on Tuesday and 45% a month ago, according to CME’s FedWatch.
Lower interest rates decrease the cost of borrowing, which can boost economic activity and oil demand.
Federal Reserve chair Jerome Powell said on Wednesday the US central bank will make interest rate decisions “when and as” they are needed, pushing back on a suggestion that a September rate cut could be seen as a political act ahead of the fall presidential election.
Reuters
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