Oil prices fell on Wednesday, giving up modest early gains, despite US government data showing domestic supplies of crude oil fell by more than 5 million barrels last week, declining for the fourth consecutive week, although gasoline and distillate inventories rose. sharp. .
Fears that more rate hikes by the Federal Reserve could cause markets to stagnate in recent days have sent oil prices down for three consecutive sessions, despite concerns about the impact of a G7 price cap on Russian oil that was imposed. Monday. .
WTI January delivery
It fell 25 cents, or 0.3%, to trade at $74 a barrel on the New York Mercantile Exchange. On Tuesday, it was the final low for the next month’s contract since Dec. 23, 2021, according to market data from Dow Jones.
The global index lost 15 cents, or 0.2%, to $79.20 a barrel on the ICE Futures Europe platform. Tuesday closed at its lowest level since January 3.
Back to Nymex, January gasoline
And it fell 0.8 percent to $ 2.1329 a gallon, while heating oil for the month of January
It traded at $2.8732 a gallon, down 1.5%.
Natural gas for the month of January was trading at $5,522 per million British thermal units, up 1%.
On Wednesday, the Energy Information Administration reported a fourth consecutive weekly decline in US crude inventories, but both gasoline and distillate inventories rose.
“If crude stocks continue to decline, they are likely to challenge the general downtrend that has been identified [oil] “Last month’s prices,” said Robbie Fraser, director of global research and analytics at Schneider Electric.
Domestic commercial crude stocks The Energy Information Administration said that a decline of 5.2 million barrels in the week ending in the second of December.
On average, analysts had expected a drop of 2.6 million barrels, according to a survey by S&P Global Commodity Insights. The American Petroleum Institute, a trade group, reported late Tuesday that crude supplies fell by 6.4 million barrels last week, Dow Jones reported, citing a source.
“Continued strength in refining activity and exports has encouraged another pull” for crude supplies, said Matt Smith, principal oil analyst for the Americas at Kpler, in response to the supply data.
With US Strategic Petroleum Reserve transfers slowing, US commercial inventories have declined year-to-date and are “set to decline further in the coming weeks,” he said.
Still, the EIA showed weekly inventory gains of 5.3 million barrels of gasoline and 6.2 million barrels of distillate. The S&P Global Commodity Insights survey called for an increase of 2.9 million barrels for gasoline and 1.9 million barrels for distillates.
The Energy Information Administration said crude inventories at Cushing, Oklahoma, the delivery hub for Nymex, fell by 400,000 barrels over the course of the week, while inventories in the Strategic Petroleum Reserve fell by 2.1 million barrels.
other market drivers
China has announced measures to roll back some coronavirus restrictions. Among them is reducing harsh lockdowns and ordering schools with no known infections to resume normal classes, the Associated Press reported Wednesday.
“Traders have been looking for more positive news when it comes to China’s zero-tolerance COVID policies,” Naeem Aslam, senior market analyst at AvaTrade, said in a market update.
And now “we’ve heard from those responsible for further easing of these measures,” providing a boost to investor sentiment in Asia — and potentially “spreading that sentiment” to Europe and the US given that China is the world’s second-largest economy, he said.
But Stephen Innes, managing partner at SPI Asset Management, warned that a “COVID tsunami in China is coming as the most populous country is forced off a COVID-free slope”, after backing a “very early way to reopen China” some markets. “It will be a tale of two haves in China, as winter oil prices and coronavirus mobility woes give way to hope for an eternal spring in the second quarter.”