Oil prices fell on Thursday as gasoline inventories in the United States, the world’s largest oil consumer, rose for a fifth consecutive week, although a draw in crude stockpiles helped support prices.
“Oil prices fell in response to U.S. gasoline stockpiles rising, however, the drop in prices is unwarranted as U.S. demand remains strong.” Analysts ,Commonwealth Bank of Australia.
U.S. crude stocks fell last week more than expected as refining output rose and exports surged, the Energy Information Administration said on Wednesday.
Crude inventories fell by 8 million barrels in the week to April 30 to 485.1 million barrels, compared with expectations for a 2.3 million barrel drop.
U.S. gasoline stocks rose by 737,000 barrels in the week, the EIA said, against a forecast for a 652,000-barrel draw.
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Oil has rallied in 2021 as key economies, including the U.S. and China, rebound from the impact of the pandemic, fanning energy demand. The strength in crude forms part of a broad advance in raw materials. However, the infections are still rising in major crude oil importers, India and Japan, weighing on prices.
The outbreak has rapidly worsened in India since the start of April, and the country is now reporting more than 350,000 cases every day. Saudi Arabia’s state energy firm, Saudi Aramco, reduced June pricing to Asia by between 10 and 30 cents per barrel. The key Arab Light grade for the region was cut to $1.70 a barrel above the benchmark, from $1.80 for May.
Both Brent and U.S. crude futures hit their highest since mid-March on Wednesday before retreating. The failure of Brent to break above $70 per barrel highlights that there is still plenty of concern over the demand outlook, with India being a major factor.
