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Crude inventories fall by 9.6 million barrels last week: EIA
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WTI trades over $69 a barrel after rising 2.8% on Wednesday
Oil steadied in Asia after a big decline in US crude stockpiles provided some optimism for a market weighed down by demand concerns. West Texas Intermediate traded near $69 a barrel after closing 2.8% higher in the previous session. Crude inventories shrunk by 9.6 million barrels last week, the largest draw in more than a month, according to the Energy Information Administration. Gasoline demand also surged to the highest since 2021.
US jet fuel demand rose to the highest since 2019 last week, the EIA reported on Wednesday. Consumption should continue to climb as the nation heads into the July 4th weekend, with a record number of motorists set to hit the road. Both benchmarks gained about 3% on Wednesday after the U.S. Energy Information Administration (EIA) said crude inventories dropped by 9.6 million barrels in the week ended June 23, far exceeding the 1.8-million barrel draw analysts had forecast in a Reuters poll. “The jury is still out on whether the second part of 2023 will bring with it the long-anticipated decline in inventories. Nonetheless, the impact that stocks have on oil prices was on display yesterday on a smaller scale,” PVM Oil analyst Tamas Varga said. Adding to pressure on oil, annual profits at industrial firms in China, the world’s second-biggest oil consumer, extended a double-digit decline in the first five months as softening demand squeezed margins. “The lack of prospects for fuel demand growth has limited the gain in oil prices, even with supply curbs by oil producers,” said Tetsu Emori, CEO of Emori Fund Management Inc. Facing falling prices, Saudi Arabia this month pledged to sharply cut its output in July, adding to a broader OPEC+ deal to limit supply into 2024. Brent’s six-month backwardation reached its lowest since December, but still indicated higher demand for immediate delivery. NN: Its sure looks to me like a very important technical and fundamental bottom has been put in. The oil market has a chance to do a zoom Zoom ZOOM because of the incredible number of short positions. It would not take much of a upmove to start tr buy triggering stops.