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Bullish EIA Data Pushes Oil Prices Higher

Irina Slav

After two consecutive weeks of crude oil inventory builds, this week the Energy Information Administration offered some respite for prices with a draw, of 3.1 million barrels for the week to June 14.

As oil prices remain apathetic despite a spike in tensions in the Middle East, the EIA also reported a draw in gasoline inventories, of 1.7 million barrels, after two weekly builds in a row totaling 4 million barrels.

Gasoline builds in driving season are invariably taken as bad news and cause for concern, but truth be told it is early days and prices at the pump are higher than they were this time last year, so it would be too early to draw any conclusions about gasoline demand just yet.

In distillate fuels, the EIA reported a 600,000-barrel inventory draw, which compared with a 1-million-barrel draw a week earlier and a build of 4.6 million barrels a week before that.

Gasoline production last week averaged 10.4 million bpd and distillate fuel production stood at 5.4 million bpd. This compares with 10 million bpd of gasoline a week earlier and 5.4 million bpd of distillate fuels. Refineries processed 17.3 million bpd, versus 17.1 million bpd a week earlier.

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EIA’s data may provide some boost to oil prices, which yesterday inched higher on reports that the United States and China will resume their trade talks ahead of the G20 summit where Presidents Trump and Xi are scheduled to meet and discuss the situation.

The geopolitical situation in the Middle East remains tense with the U.S. claiming it has evidence that the Iranian Revolutionary Guard was behind the latest attacks on two tankers in the Gulf of Oman, in which Iran categorically denying any involvement. The investigation into the event is ongoing. Prices reacted with a jump on the news of the attacks but quickly retreated, possibly because the fundamentals situation does not merit a more lasting prices rise.

At the time of writing, Brent crude was trading at US$61.72 a barrel, with West Texas Intermediate at US$53.78 a barrel, both slightly down from opening of trade.

By Irina Slav for Oilprice.com

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