Crude oil futures prices closed mixed on Wednesday (5th),Brent Crude OilFutures ended slightly higher, while WTI Crude OilAfter rising for 4 consecutive trading days, it closed slightly lower.
Crude oil prices have found support this week as the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, decided to cut oil production over the weekend, amid expectations of tighter supplies.
Weak U.S. economic data on Wednesday added to investor concerns that a recession would hurt energy demand, but official data showing weekly declines in U.S. crude, gasoline and distillate supplies was “far from a recession,” one analyst said. characterization.
energy commodity prices
- West Texas Intermediate (WTI) crude futures for May delivery fell 10 cents, or 0.1%, to settle at $80.61 a barrel.
- June delivery Brent Crude OilFutures rose 5 cents, or nearly 0.1%, to settle at $84.99 a barrel.
- Gasoline futures for May delivery rose 3% to settle at $2.8201 a gallon, the highest close for the nearest month since October.
- delivered in MayHot Fuel FuturesPrices rose 2.4 percent to $2.731 a gallon.
- Natural gas futures for May delivery rose 2.3% to settle at $2.155 per million Btu.
Supply of Crude Oil and Petroleum Products Falls
Matt Smith, chief oil analyst for the Americas at Kpler, said strong U.S. crude exports, coupled with a modest decline in refining activity, were enough to offset a strong rebound in imports, keeping crude supplies down for a second week in a row.
The US Energy Information Administration (EIA) announced on Wednesday that US commercial crude oil inventories fell by 3.7 million barrels last week (3/31).
Analysts on average expected a draw of 7.5 million barrels last week, according to S&P Global Commodity Insights. According to sources, the American Petroleum Institute (API) announced late Tuesday that US crude oil inventories fell by 4.3 million barrels last week.
The decline in crude inventories was limited by a small release from the Strategic Petroleum Reserve (SPR) into commercial inventories, Smith said. EIA data showed that SPR oil inventories stood at 371.2 million barrels, down 400,000 barrels from a week earlier.
EIA data also showed that gasoline inventories fell by 4.1 million barrels last week and distillate inventories fell by 3.6 million barrels. Analysts had expected gasoline inventories to fall by 1.3 million barrels and distillate stocks fell by 140,000 barrels, according to the survey.
Stronger implied demand for gasoline and distillate fueled more consumption, making the reported data more bullish, Smith said.
Crude inventories at the Cushing, Oklahoma, delivery hub for the New York Mercantile Exchange fell by 1 million barrels last week, according to the EIA.
Phil Flynn, senior market analyst at Price Futures Group, believes that the supply data released by the EIA on Wednesday shows that the economy is far from a recession, but at this stage the market seems to be overwhelmed by concerns about a recession on the supply side.
Economic data and other drivers
According to the ADP national economic report released on Wednesday, the number of private sector employment in the United States increased by 145,000 in March. According to the “Wall Street Journal” survey, the data was lower than the 210,000 new jobs expected by economists.
The Institute for Supply Management’s (ISM) index of services sector activity fell to 51.2% in March from 55.1% in the previous month. The index is a barometer of the business conditions of U.S. companies.
Oil prices have rallied sharply over the past two sessions as OPEC+ announced over the weekend that it will cut production by about 1.16 million barrels per day between May and the end of the year. The resolution is an expansion of the scale of production cuts that OPEC+ has already cut by 2 million barrels per day. In addition, Russia has previously decided to cut production by 500,000 barrels per day by the end of this year.
DTN senior market analyst Troy Vincent said that the oil market has absorbed the initial impact of OPEC+’s expansion of production cuts, but because the season is entering the summer, if demand is unexpectedly high, oil prices may continue to rise, but this is a “huge assumption.” .
He noted that gasoline demand had recovered in recent months along with increased consumer spending in the services sector, but today’s disappointing US ISM services PMI data suggested that US consumer spending may be nearing its limit.
Still, several Wall Street banks “still raised their crude oil price forecasts after OPEC+ announced production cuts.
ING analysts believe that OPEC + extended production cuts will mean that the market supply will be tighter later this year, so it is expected that in the second half of this year Brent Crude OilTransaction prices will exceed $100 per barrel.
ING expects the second half of this year Brent Crude OilThe average price was US$101 per barrel, while in the fourth quarter Brent Crude OilThe average price was $104 per barrel.
