As the US enters its busy summer driving season, the market’s forecast regarding demand was optimistic. Oil prices fell, however, on Thursday as inventory data in the United States, the world’s largest oil consumer, showed an increase in gasoline stockpiles, which expressed weaker-than-expected fuel demand.
Brent crude futures fell 55 cents, or 0.8%, to $71.67 at 0341 GMT, while West Texas Intermediate (WTI) oil futures fell 53 cents, or 0.8%, to $69.43 a barrel.
The rapid spread of coronavirus vaccines and increasing vehicle usage rates are a plus for the demand for transportation fuel. However, these data underline that the road to recovery will not be smooth.
U.S. crude inventories, including the Strategic Petroleum Reserve (SPR), fell for 11 weeks as refineries ramped up production, but fuel inventories rose sharply due to weak consumer demand, official data released Wednesday showed.
Crude inventories excluding SPR, which fell for three consecutive weeks, fell 5.2 million barrels to 474 million barrels in the week of June 4. However, fuel stocks rose sharply and daily supplies fell 17.7 million barrels from 19.1 million barrels a week earlier.
Gasoline demand fell from 9.15 million barrels per day to 8.48 million barrels per day for the week of June 4, according to EIA data. However, this amount was 7.9 million barrels a year ago.
Libya’s Waha Oil Co is aiming to return to normal production operations on Thursday, after a pipeline leak that cut oil production at Es Sider crude oil export terminal by more than half was repaired, according to a source.
In India, the world’s third-largest oil consumer, fuel demand slumped in May to its lowest level since August last year, and a second wave of COVID-19 halted economic activity.