Crude oil prices ticked higher today after the U.S. Energy Information Administration reported an inventory decline of 2.5 million barrels for the week to June 14.
The change compared with an inventory build of 2.7 million barrels for the previous week, which pressured prices.
In fuels, the Energy Information Administration estimated inventory draws for the week to June 14.
Gasoline stocks shed 2.3 million barrels in the week to June 14 signaling a strong start to summer driving season that would inevitably affect oil market sentiment.
The inventory change compared with a build of 2.6 million barrels for the previous one.
Gasoline production last week averaged 10.2 million barrels daily, which compared with 10.1 million barrels daily for the previous week.
In middle distillates, the authority estimated an inventory decline of 1.7 million barrels for the week to June 14. This compared with a build of 900,000 barrels for the previous week.
Middle distillate production averaged 4.8 million barrels daily last week, which compared with 5 million barrels daily for the previous week.
Oil meanwhile has been on an upward trajectory this week after the latest Ukrainian drone attack on a Russian terminal that caused a fire and after the foreign minister of Israel said the country was nearing an all-out war with Hezbollah.
Thanks to this geopolitical premium Brent crude ticked up back above $85 per barrel, with West Texas Intermediate at over $82 per barrel at the time of writing. Expectations of rate cuts in the U.S. also tipped the scales in the direction of higher prices as lower rates are supposed to boost demand for commodities including oil.
These expectations got a fresh boost earlier today on signs of cooling of the U.S. jobs market after the latest weekly jobless claims report showed a decline.
“Our balance shows the market tightening in the third quarter of this year after the rollover of OPEC+ cuts, so we should be seeing signs of a tightening in the physical market,” ING analysts Warren Patterson and Ewa Manthey wrote in a note Wednesday.
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“However, how tight it becomes depends on how demand performs. Weak refinery margins remain a concern for the market,” they noted.
By Irina Slav for Oilprice.com
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