Connect with us

Hi, what are you looking for?

Commodities & Futures

U.S. Oil Hits 2018 Highs Before Sliding on Mammoth Gasoline, Diesel Build

Commodities1 hour ago (Jun 09, 2021 03:58PM ET)

(C) Reuters.

(Adds Brent settlement, comment on OPEC+)

By Barani Krishnan

Investing.com – U.S. oil prices hit their highest since 2018 before sliding on Wednesday as the government reported a mammoth weekly build in gasoline and diesel stockpiles amid a ramp-up in output by refiners anticipating runaway demand for fuels this summer.

West Texas Intermediate crude, the benchmark for U.S. oil, settled down 9 cents, or 0.1%, at $69.96 per barrel after racing earlier to $70.63, its highest since October 2018. WTI has gained 5.6% since the start of June.

Brent crude, which acts as the global benchmark for oil, settled flat at $72.12. Brent hit $72.85 earlier in the session, its highest since May 2019. It has gained 4% since the start of June.

Gasoline inventories rose by 7.05 million barrels during the week ended June 4, the Energy Information Administration said in its Weekly Petroleum Status Report. Analysts tracked by Investing.com had forecast a build of just 1.2 million barrels.

Stockpiles of distillates, which include diesel and heating oil, rose by 4.4 million barrels against expectations for a 1.8 million barrel rise.

Crude stockpiles fell sharply too, by 5.2 million barrels versus forecasts for a 3.5 million-barrel decline. But that was only because of the ramp up in fuel production due to a spike in refining activity.

The EIA said refinery runs rose by 2.6 percentage points to 91.3% last week, the first time they had run above the key 90% threshold for months. Clearing that bar was somewhat a vindication for oil bulls betting on upcoming demand for fuels in the summer months.

Analysts have projected one of the biggest ever summer demand periods for fuel in the U.S. as the economy reopens fully from a year of lockdowns and safety measures imposed after the March 2020 outbreak of the coronavirus pandemic.

“Refineries are running flat out to build inventories ahead of summer driving season,” economist Adam Button said in a post on ForexLive. “There is already talk of heavy traffic on the roads.”

Sophie Griffiths, head of UK and EMEA research for online broker OANDA, said WTI and Brent appeared poised for more gains in the coming weeks after OPEC+’s apparent success in getting the market to accept a hike in production through July.

U.S. Secretary of State Antony Blinken also provided more support to the market by saying hundreds of Treasury Department sanctions were expected to remain on Iranian oil even if Tehran managed to strike a new nuclear deal with world powers to legitimately put its crude exports back on the world market.

The oil rally had been somewhat held back in recent weeks by concerns that Iran could put some 2 million additional barrels on the market in the course of the next few months.

“The ducks have lined up nicely for the oil market right now,” Griffiths said. “With no OPEC meeting due until early July, (WTI) oil could well target $72 in the coming weeks.”

U.S. Oil Hits 2018 Highs Before Sliding on Mammoth Gasoline, Diesel Build

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.

Uncategorized

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.

Uncategorized

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: Buzzclever.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved