U.S. Oil Prices Increase Amid Falling Inventories and Rising Demand
- U.S. oil prices are on the rise due to a decrease in inventories coupled with an uptick in demand as summer approaches.
- Market analysts are closely monitoring stockpiles to ascertain whether the anticipated summer fuel demand will materialize.
- This trend highlights the potential volatility in oil prices driven by supply and demand dynamics.
U.S. crude oil prices rose nearly 1% on Wednesday, surpassing $82 per barrel, driven by a decline in U.S. inventories and optimistic demand forecasts from OPEC. The Energy Information Administration reported a drop of 3.4 million barrels in U.S. oil inventories last week, alongside a two million barrel decrease in gasoline stocks. However, implied oil demand showed a slight decrease, falling by 334,000 barrels per day. Year-to-date, U.S. oil has seen a significant increase of 14.58%, while the global benchmark has risen by 10.44%. In related markets, the RBOB gasoline August contract closed at $2.50 per gallon, down 2 cents, with gasoline prices up 19% for the year. Conversely, the August natural gas contract fell to $2.33 per thousand cubic feet, reflecting a year-to-date decline of 7.3%. OPEC has maintained its oil demand growth forecast at 2.2 million barrels per day for 2024, revising global economic growth expectations slightly upward to 2.9%. This adjustment is attributed to stronger-than-anticipated performances in major economies, including Brazil, Russia, India, China, and a recovery in the eurozone. Market analyst Tamas Varga noted that recent selling pressure may be linked to renewed ceasefire discussions between Hamas and Israel, as well as the impact of Hurricane Beryl. While oil infrastructure on the Gulf Coast appears largely intact, the closure of the port of Houston could lead to a decline in oil exports, potentially increasing inventories in the upcoming data release.