U.S. stocks tumbled on Wednesday, denting sentiment toward risky assets, so crude futures reversed course and closed lower on Wednesday even as data showed an unexpected drop in U.S. crude inventories and a sharp drop in gasoline supplies.
energy commodity prices
- Delivered in June WTI CrudeFutures fell $2.81, or 2.5 percent, to settle at $109.59 a barrel.
- Delivered in July Brent CrudeFutures fell $2.82, or 2.5 percent, to settle at $109.11 a barrel.
- Natural gas futures for June delivery rose 0.8% to settle at $8.368 per million Btu.
- Gasoline futures for June delivery fell 5.6% to settle near $3.7206 a gallon.
- Delivered in JuneThermal Fuel FuturesPrices fell 3.5 percent to settle at $3.6681 a gallon.
market driving force
The Energy Information Administration (EIA) announced that US crude oil inventories fell by 3.4 million barrels last week (up to 5/13), gasoline inventories fell by 4.8 million barrels, and distillate inventories increased by 1.2 million barrels.
Analysts had expected U.S. crude inventories to rise by 2.1 million barrels last week, gasoline inventories fell 100,000 barrels, and distillate inventories fell 1 million barrels, according to a S&P Global Commodity Insights survey.
The American Petroleum Institute (API) reported late on Tuesday that U.S. crude oil inventories fell by 2.4 million barrels last week, gasoline inventories fell by 5.1 million barrels, and distillate inventories rose by 1 million barrels.
“Despite the release of 5 million barrels of oil from the Strategic Petroleum Reserve and increased production and imports, more refining activity and higher crude exports have kept crude inventories down,” said Matt Smith, chief oil analyst for the Americas at Kpler.
“Crude oil inventories fell, while gasoline inventories also fell solidly as implied demand rose to above 9 million barrels. Implied demand for distillates also rose slightly, but inventories continued to rise slightly.”
Analysts said the sell-off in U.S. stocks appeared to have lost momentum in energy futures. “While the inventory data is bullish, it appears to be irrelevant as recession fears resurface.”
U.S. stocks fell sharply on Wednesday,Dowfell more than 1100 points or more than 3.5%,S&P 500 The index fell more than 4%.
Analysts said crude’s early gains were partly due to the prospect of China, the world’s largest crude importer, easing restrictions to prevent the spread of the virus.
SPI Asset Management executive managing director Stephen Innes wrote in a report that the market is optimistic about a “massive surge in oil demand and prices,” which is positive for producers, albeit detrimental to consumer sentiment.
“With unsustainable high gas prices at gas stations due to a shortage of supply, the Fed will be on a mission to raise interest rates to at least moderate the demand side of the economy, which could ultimately lead to a form of moderate demand destruction, which is buying at the peak of the summer driving season. Instead of spending big bucks, the family might quit.”
UK data on Wednesday showed that annual consumer prices climbed to a 40-year high, boosted by rising energy prices.
Ole Hansen, head of commodity strategy at Saxo Bank, noted in a Wednesday report that crude oil has been pushing up the upper end of its trading range over the past few weeks.
“Over the past few weeks, the focus has shifted from the range-bound crude oil market to the product market, with the cost of gasoline, diesel and jet fuel soaring to levels not seen in years. Refinery maintenance, post-pandemic production declines, and buyers boycotting themselves For Russian products, these factors add up to an incredibly tight market,” Hansen said.