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26/06/24
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Oil Prices Decline on Inventory Data
On June 26, oil prices were somewhat on the downside, as there are forecasts of an ultimate inventory drawdown during Q4 peak summer demand season, with geopolitical risks from the Middle East conflict also weighing on markets.
Brent crude oil futures declined by more than 0.2 percent and U.S. West Texas Intermediate crude futures fell by almost 0.15 percent. On June 25, the American Petroleum Institute’s (API) report revealed that United States oil stocks increased by 914k barrels in the past week.
The decline in oil prices came after official inventory data showed a rise in oil and gasoline inventories, dashing some traders’ hopes that a bullish inventory report would add more fire to the latest rally.
The Energy Information Administration’s (EIA) data showed that crude oil stockpiles rose by 3.6 million barrels last week, relative to analysts’ expected decline by 2.9 million barrels. Gasoline stockpiles increased by 2.7 million barrels relative to a forecast of 1 million barrels drawdown. It seems demand remains soft based on rising crude and fuel inventories signals.
The Israel-Lebanon border is being monitored by traders, as both Israel and Hezbollah traded fire across it for months. Markets are concerned about potential disruption in crude oil supplies if an Israeli offensive in Lebanon triggers a direct confrontation with Iran. The USD’s strength is also weighing on oil markets, making USD-priced oil further expensive for buyers with other currencies.
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