US Commercial Crude Oil Reserves Fall Slightly, Prices Find Support

Washington (awp/afp) – Commercial crude oil reserves fell very slightly last week in the United States, according to figures released Wednesday by the US Energy Information Agency (EIA).

During the week ended June 2, commercial inventories fell by 500,000 barrels when analysts expected an increase of 1.5 million barrels, according to a consensus established by the Bloomberg agency.

Reserves now stand at 459.2 million barrels, 2% below the average for the past five years at this time of year.

The fact that commercial stocks have been reduced slightly is in addition to the fact that the government has again drawn on the strategic oil reserves (SPR) which have decreased by 1.9 million barrels.

“The market was expecting an increase in reserves” which is usually bearish for the price of a barrel “but between the reduction in commercial stocks and that of strategic reserves, prices found support”, commented for AFP Andy Lipow of Lipow Oil Associates.

Crude prices, up slightly at the opening, thus accelerated their progression after the publication of the EIA figures.

The barrel of Brent from the North Sea, for delivery in August, gained 1.19% to 77.20 dollars around 3:30 p.m. GMT.

Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in July, advanced 1.35% to 72.71 dollars.

Gasoline inventories, on the other hand, rose by 2.7 million barrels while analysts bet on a smaller increase of 1 million barrels. “This increase in gasoline stocks is explained by the increase in imports in recent weeks,” said Andy Lipow.

This swelling of gasoline and diesel stocks puts a little pressure on prices, the analyst further noted. “But travel season is still ahead of us, as is the heart of hurricane season,” which often results in refinery shutdowns on the Gulf Coast, he said.

Last week, the utilization rate of US refineries rose to 95.8% against 93.1% the week before, which also explains the increase in fuel stocks.

US crude production edged up to 12.4 million barrels per day from 12.2 million the previous week.

Demand eased modestly to 19.2 million barrels per day from 19.4 million the previous week.

On average over four weeks, an indicator closely monitored by operators, deliveries of gasoline, kerosene and distilled products are stable compared to those of last year at the same time.

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