Analysis by Dr. Nancy Yamaguchi
Oil prices dove again yesterday, with West Texas Intermediate (WTI) crude prices hitting bottom at approximately $42.25 per barrel (/b). Prices are trending back up in today’s early morning trading. WTI prices have recovered to the $42.75/b level currently.
The Energy Information Administration (EIA) released the official weekly supply data yesterday. The bottom line was far less bearish than it could have been, yet the price response was lukewarm and short-lived.
The EIA data on crude inventories showed a stock draw of 2.451 million barrels (MMbbls), in line with the 2.72-MMbbl drop predicted by the American Petroleum Institute (API). The EIA reported a distillate stock build of 1.079 MMbbls, below the API’s expectation of 1.84 MMbbls. The EIA also reported a gasoline stock draw of 0.578 MMbbls, in contrast with the API’s report showing a gasoline stock build of 0.346 MMbbls. Nonetheless, buying interest crept up only briefly, and the downward price trend reasserted itself.
The EIA data also reported a bounce-back in gasoline demand during the week ended June 16, alleviating a serious collapse in apparent demand during the week ended June 2 and the week ended June 9. During the first two weeks of June, apparent gasoline demand averaged 9,293 thousand barrels per day (kbpd), more than 300 kbpd below the May average of 9,596 kbpd. The new weekly data brought the average demand level up to 9,467 kbpd. This still was 129 kbpd below May’s average demand, but the market could view it as a step in the right direction.
During the first three weeks of June, U.S. refiner net input of crude oil averaged nearly 17,212 kbpd, up by nearly 44 kbpd from May’s average crude input. Refinery crude runs have hit record-high levels recently.
WTI crude prices are approximately $42.75/b this morning, stabilizing after another sharp drop yesterday. Prices continued slide yesterday, closing at $42.53/b, the lowest closing price since August 10, 2016. WTI opened at $42.55/b today, a drop of 83 cents, or 1.91%, below yesterday’s opening price. Prices are trending back up slightly, and WTI is currently $42.74/b, up by 21 cents from yesterday’s closing price.
Diesel opened at $1.3619/gallon this morning. This was a drop of 2.95 cents (2.12%) below yesterday’s opening price. Current prices are $1.3704/gallon, up by 0.56 cents from yesterday’s closing price.
Gasoline opened at $1.4112/gallon today, a drop of 1.16 cents, or 0.82%, from yesterday’s opening. Prices are $1.4208/gallon currently, a recovery of 1.03 cents from yesterday’s close.