Oil: Profit closure after US crude and gasoline stocks fell

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Oil prices closed higher on Wednesday as official data released today showed a drop in US crude and gasoline inventories ahead of Memorial Day weekend, a period of increased driving and fuel consumption.

Particularly, The American WTI crude delivery in July gained 56 cents or 0.5% and closed at $ 110.33 a barrel. Alongside, the Brent July delivery added 47 cents, or 0.45, to $ 114.03 a barrel.

The Energy Information Administration (EIA) said U.S. crude stockpiles fell 1 million barrels last week as refineries increased their activity in response to the expected seasonal increase in gasoline demand, while gasoline inventories fell by 500,000 barrels and refined stocks increased by 1.7 million barrels.

Analysts surveyed by S&P Global Commodity Insights expected crude inventories to rise by 100,000 barrels, gasoline supplies expected to fall by 500,000 barrels and refined stocks expected to rise by 600,000 barrels.

The U.S. Petroleum Institute announced late Tuesday that U.S. crude stockpiles rose 567,000 barrels last week, according to market sources. Gasoline inventories fell by 4.2 million barrels, while refined inventories fell by 949,000 barrels.

“The tightening in the US gasoline market will increase supply concerns as we enter a period of increased driving,” said Warren Patterson, head of commodity strategy at ING.

US Secretary of Energy Jennifer Granholm told reporters in Louisiana on Tuesday that the Biden administration was considering imposing restrictions on oil exports to cut gasoline and diesel prices. “I can confirm that the president is not excluding anything from the table,” Granholm was quoted as saying by Reuters.

The European Union, meanwhile, is continuing negotiations to ban imports of Russian oil and other energy sources, and a meeting of EU leaders later this month is unlikely to lead to a final agreement, Patterson said.

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Source: Capital

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