Weekly Crude Oil Review: WTI Crude Holds Above $40 Per Barrel

Weekly Crude Oil Review: WTI Crude Holds Above $40 Per Barrel

Jul 04, 2020 03:07 IST capital market

Crude oil eased as three month highs continued to act as stiff resistance levels. WTI Crude oil closed just above $40.10 per barrel. MCX Crude oil futures also slipped under Rs 3000 per barrel. Traders fear that in prices rise further then the US oil rig counts, which is hovering around record lows, could increase as rising prices would also trigger a spurt in supplies. The overall muted outlook on the economic front is also triggering corrective action. Crude oil inventories in the United States recorded a drop of 7.2 million barrels in the week to June 26, the Energy Information Administration (EIA) reported. For the previous week, the EIA reported an inventory build, at 1.4 million barrels, after another moderate build, of 1.2 million bpd, for the week before. Oil inventories remain above the five-year average for this time of the year, but refinery runs for the past few weeks suggest demand for fuels is increasing, albeit slowly. Last week, these averaged 14 million bpd, compared with 13.8 million bpd a week earlier, and 13.6 million bpd two weeks earlier. Gasoline production averaged 8.9 million bpd in the week to June 26, up from 8.8 million bpd a week earlier. Gasoline inventories added 1.2 million barrels last week, after a weekly draw of 1.7 million barrels for the week to June 19. Distillate fuel production averaged 4.6 million bpd last week, versus 4.6 million bpd a week earlier. Distillate fuel inventories shed 600,000 barrels in the week to June 26. Distillate fuel demand has been slower to recover as air transport remains limited amid the continuing pandemic.

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