Oil prices fell Wednesday after an unseasonal growth in crude stockpiles overshadowed the second-biggest weekly draw in U.S. gasoline this summer. Additionally, data showing Saudi Arabia pumped oil at record volumes in July added to worries about a global crude oversupply.
U.S. crude inventories gained 1.1 million barrels in the week ended August 5th, the U.S. Energy Information Administration (EIA) reported, in a third straight week of builds that were unexpected by the market. The EIA also reported that U.S. gasoline stocks fell 2.8 million barrels last week, which is the second-largest weekly draw for gasoline since mid-April. It was expected that there would only be a gasoline stockpile drop of 1.1 million barrels.
U.S. gasoline futures fell 3% on the day, despite adding 1% early on after the larger-than-expected weekly draw. U.S. West Texas Intermediate Crude oil futures fell 2.48% on the day, and International benchmark Brent crude futures were down 2.3%.
The EIA also added to the bearish outlook on oil’s supply-demand picture yesterday with a forecast that showed it was scaling back estimates for U.S. crude oil output declines in 2016. And just a day later today Saudia Arabia told OPEC that the kingdom’s output in July reached a record high of 10.67 million barrels-per-day, further adding to oversupply concerns.
The renewed concerns come shortly after there was speculation that members in and outside of OPEC could come together to work towards output freezes in an effort to reduce the current oversupply of oil that continues to weigh on oil prices. It seems as though for now the industry continues to produce more oil than the markets can absorb, and oil prices will likely remain in their current range for the near-term, though the commodity is likely to remain volatile in price.
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Oil Prices Fall Wednesday Despite Second-Biggest Weekly Draw In US Gasoline This Summer
Oil prices fell Wednesday after an unseasonal growth in crude stockpiles overshadowed the second-biggest weekly draw in U.S. gasoline this summer. Additionally, data showing Saudi Arabia pumped oil at record volumes in July added to worries about a global crude oversupply.
U.S. crude inventories gained 1.1 million barrels in the week ended August 5th, the U.S. Energy Information Administration (EIA) reported, in a third straight week of builds that were unexpected by the market. The EIA also reported that U.S. gasoline stocks fell 2.8 million barrels last week, which is the second-largest weekly draw for gasoline since mid-April. It was expected that there would only be a gasoline stockpile drop of 1.1 million barrels.
U.S. gasoline futures fell 3% on the day, despite adding 1% early on after the larger-than-expected weekly draw. U.S. West Texas Intermediate Crude oil futures fell 2.48% on the day, and International benchmark Brent crude futures were down 2.3%.
The EIA also added to the bearish outlook on oil’s supply-demand picture yesterday with a forecast that showed it was scaling back estimates for U.S. crude oil output declines in 2016. And just a day later today Saudia Arabia told OPEC that the kingdom’s output in July reached a record high of 10.67 million barrels-per-day, further adding to oversupply concerns.
The renewed concerns come shortly after there was speculation that members in and outside of OPEC could come together to work towards output freezes in an effort to reduce the current oversupply of oil that continues to weigh on oil prices. It seems as though for now the industry continues to produce more oil than the markets can absorb, and oil prices will likely remain in their current range for the near-term, though the commodity is likely to remain volatile in price.
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