Crude oil prices rose today after the US Energy Information Administration reported a 2.5 million barrel drop in inventories for the week ended June 14.
This change compares with a stockpile build of 2.7 million barrels in the previous week, which pressured prices.
In the case of fuel, the Energy Information Administration has estimated inventories for the week through June 14.
Gasoline stocks fell by 2.3 million barrels in the week ended June 14, signaling a strong start to the summer driving season, which will inevitably have an impact on oil market sentiment.
Inventories changed by 2.6 million barrels compared to last year.
Gasoline production averaged 10.2 million barrels per day last week, compared with 10.1 million barrels per day the previous week.
In medium distillates, the authority forecast an inventory decline of 1.7 million barrels for the week ended June 14. This compared with an increase of 900,000 barrels in the previous week.
Middle distillate output averaged 4.8 million barrels per day last week, compared with 5 million barrels per day in the previous week.
Meanwhile, oil prices have been on the rise this week since a Russian terminal was attacked by a Ukrainian drone, causing a fire, and Israel's foreign minister said his country was close to full-blown war with Hezbollah.
Thanks to this geopolitical premium, the price of Brent crude again rose above $85 per barrel, while the price of West Texas Intermediate was above $82 per barrel at the time of writing. Expectations of rate cuts in the US also pointed to a rise in prices as lower rates are expected to increase demand for commodities including oil.
These hopes got a fresh boost today after the latest weekly unemployment claims report showed a decline, showing signs of cooling in the US jobs market.
“Our balances show market tightening in the third quarter of this year following the OPEC+ cuts, so we should see signs of tightening in the physical market,” ING analysts Warren Patterson and Eva Manthey wrote in a note on Wednesday.
“However, how tight it will be depends on how the demand remains. Weak refinery margins remain a concern for the market,” he said.
By Irina Slav for Oilprice.com
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