Economy 2 MIN READ

Oil dips as market weighs supply concerns, fuel stocks build

June 30, 2022By Reuters

Oil prices edged lower in volatile trading on Thursday as the market weighed concerns of global supply and a build in US fuel product inventories.

Brent crude futures for September, the more actively traded contract, were down 45 cents, or 0.4%, to USD 112.00 per barrel at 0711 GMT.

The August contract, which expires Thursday, was at USD 115.15, down USD 1.11 a barrel, or 1.0%.

US West Texas Intermediate (WTI) crude futures fell 57 cents, or 0.5%, to USD 109.21.

“The net drop in crude oil inventories was flattered by SPR releases, while the gasoline stock jump is because US refineries are running at over 95.0% capacity,” said Jeffrey Halley, OANDA’s senior market analyst for Asia Pacific.

Crude inventories fell by 2.8 million barrels in the week to June 24, far exceeding analysts’ expectations in a Reuters poll for a 569,000 barrel drop, US Energy Information Administration data showed, though US gasoline and distillate stockpiles climbed.

Fuel stocks rose as refiners ramped up activity, operating at 95% of capacity, the highest for this time of year in four years.

But further disruptions to supply limited price declines, said ANZ analysts, amid a suspension of Libyan shipments from two key eastern ports, while Ecuador saw output fall due to ongoing protests.

Exports of Ecuador’s flagship Oriente crude remain suspended under a force majeure declaration as the spread of anti-government protests hurt oil output, state-run Petroecuador said on Wednesday.

Meanwhile, the OPEC+ group, which includes allies such as Russia, began two days of meetings on Wednesday, though sources said there was little prospect of pumping more oil.

(Reporting by Jeslyn Lerh in Singapore and Arathy Somasekhar in Houston; editing by Kim Coghill and Jason Neely)


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