Oil futures remained in positive territory, but off session highs, on Wednesday after government data showed another drop in U.S. crude inventories as traders await this week’s decision by OPEC+ on output.
West Texas Intermediate crude for August delivery CL00, +0.79% CLQ21, +0.79% rose 49 cents, or 0.7%, to finish at $73.47 a barrel on the New York Mercantile Exchange, holding gains after the Energy Information Administration said U.S. crude inventories fell by 6.7 million barrels in the week ended June 25.
“The EIA has reported a sixth consecutive draw to crude inventories, as the usual suspects — refinery runs and crude exports — both showed strength,” said Matt Smith, director of commodity research at ClipperData. “A rebound in refinery runs and ongoing robust exports were no match as both production and imports were reported to have ticked lower.”
The EIA said gasoline inventories rose by 1.5 million barrels last week, while supplies of distillates fell by 900,000 barrels. Analysts surveyed by S&P Global Platts had looked for crude stocks, on average, to fall by 4.7 million barrels, while gasoline supplies were seen down by 700,000 barrels; distillate stocks had been expected to rise by 100,000 barrels.
The American Petroleum Institute, an industry trade group, reported Tuesday afternoon that U.S. crude-oil inventories fell by 8.15 million barrels last week, according to a source who cited the data. API also saw gasoline inventories rise by 2.42 million barrels, while distillate supplies were up 428,000 barrels, the source said.
WTI, the U.S. benchmark posed a 24.2% quarterly rise, based on activity in front-month contracts, and a gain of more than 51% in the year to date.
September Brent crude BRN00, +0.05% BRNU21, +0.05%, the global benchmark, rose 34 cents, or 0.5%, to end at $74.62 a barrel on ICE Futures Europe. August Brent crude BRNQ21, +0.49% gained 37 cents, or 0.5%, to close at $75.13 a barrel. Based on front-month contracts, Brent rose 18.2% in the second quarter and was up 45% in the year to date.
The OPEC+ decision remains the main event of the week. A meeting of the body’s Joint Ministerial Monitoring Committee, or JMMC, was postponed by a day to Thursday, news reports said, in a move that means three meetings — OPEC ministers, the JMMC and then OPEC+ ministers — will take place on Thursday.
The JMMC delay was aimed at giving parties more time to reach a compromise, with Russia considering a proposal to hike production, while Saudi Arabia would prefer a more gradual approach, Bloomberg reported. Analysts have largely penciled in a decision that would allow output to rise by around another 500,000 barrels a day beginning in August.
“We would not overinterpret this as dissent,” said Eugen Weinberg, commodity analyst at Commerzbank, in a note.
“It is rather the case that OPEC+ currently has the luxury of being able to control events on the oil market in the medium term, partly because the reaction of countries outside the producers’ alliance has been fairly disappointing,” he said.
In particular the restrained response to rising oil prices by the U.S. shale oil industry, which is now showing economic and financial discipline and following a “sustainable growth” approach rather than the “growth at any cost” principle, has allowed OPEC to serve as the marginal producer, with control over prices, Weinberg said.
Meanwhile, August gasoline RB00, -0.07% RBQ21, -0.07% rose marginally to end at $2.2518 a gallon, while August heating oil HO00, +0.21% HOQ21, +0.21% finished at $2.1283 a gallon, up 0.2%.
August natural-gas futures NG00, +0.85% NGQ21, +0.85% rose 0.5% to $3.65 per million British thermal units, its highest close since Dec. 21, 2018, as hot temperatures grip the western U.S.
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