-4.30%<\/bg-quote>
\n rose 3.3% at $2.40 per million British thermal units.<\/p>\n<\/li>\n<\/ul>\nOil supplies<\/h2>\n
The U.S. Energy Information Administration on Wednesday reported a weekly decline crude stockpiles for the first time in three weeks, with the more than 12 million-barrel drop the largest year to date. <\/p>\n
\u201cOil demand refuses to fit the weakening economy narrative with demand surging and refiners running all out,\u201d Phil Flynn, senior market analyst at The Price Futures Group, told MarketWatch.<\/p>\n
\u201cThe trends would suggest more crude-oil drawdowns in the coming weeks as gasoline supply\u00a0is tight\u201d and the market surge in demand is coming, he said. This report should be a wake up call to hedge fund shorts as the U.S. [gasoline] stocks are tight in New York and the West Coast.\u201d<\/p>\n
U.S. commercial crude inventories fell by 12.5 million barrels for the week ended May 19, the EIA reported. That compared with an average decline of 500,000 barrels forecast by analysts polled by S&P Global Commodity Insights. The American Petroleum Institute late Tuesday reported a 6.8 million barrel drop in U.S. crude inventories last week, according to a source citing the data.<\/p>\n
The large draw in crude supplies follows a sharp 1.25 million barrel per day, or near 50% week-on-week decline in net imports of crude, said Troy Vincent, senior market analyst at DTN, adding that exports are moving higher on the back of Asian purchases. <\/p>\n
The EIA report showed weekly inventory declines of 2.1 million barrels for gasoline and 600,000 barrels for distillates. Analysts had forecast a weekly fall of 800,000 barrels for gasoline and distillates stockpiles were expected to be unchanged for the week. <\/p>\n
Crude stocks at the Cushing, Okla., Nymex delivery hub rose by 1.7 million barrels for the week, the EIA said, while stocks in the Strategic Petroleum Reserve fell by 1.6 million barrels.<\/p>\n
According to Flynn, without the SPR release of 1.6 million barrels of oil, the weekly fall in crude stockpiles would have been the biggest since 2016.<\/p>\n
Other market drivers<\/h2>\n
Overall, oil prices are trading higher for the week, with traders looking to a potential a boost in demand and prospects for tighter crude supplies. <\/p>\n
\u201cWhile U.S. debt ceiling negotiations will remain a major source of downside price risk until a firm deal is achieved, the crude market is increasingly turning its eye toward a summer that could be defined by a seasonal demand bump from travel coinciding with deeper OPEC+ cuts, and attempts by the U.S. to build back strategic reserves,\u201d wrote Robbie Fraser, manager, global research & analytics at Schneider Electric, in a daily market update.<\/p>\n
Crude prices rose Tuesday after Prince Abdulaziz bin Salman, Saudi Arabia\u2019s energy minister, warned short sellers of pain ahead, recalling the spike in prices that followed OPEC+\u2019s early April announcement of unexpected production cuts. OPEC+ ministers are slated to meet in Vienna in early June.<\/p>\n
\u201cIn summary, bin Salman gave a clear hint that OPEC is preparing to announce another output cut when it meets at the beginning of June,\u201d said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note.<\/p>\n
It\u2019s \u201cimportant to note that any OPEC-induced boost to oil prices will likely remain short lived. The 200-DMA, which stands a touch below the $80 [a barrel] level, will likely continue act as a solid resistance to any rally in the short run,\u201d she said.<\/p>\n
Also see:<\/strong> Goldman Sachs sees potential for strong commodity performance after largest \u2018destocking\u2019 ever witnessed<\/p>\nStill, the question of a recession is not off the table, said Tariq Zahir, managing member at Tyche Capital Advisors. \u201cA recession would lead to weaker prices across the energy complex.\u201d<\/p>\n
That would likely be \u201can opportunity to get long as we see prices going higher even if we go into a recession,\u201d with Saudi Arabia potentially taking more oil out of the market if a recession does happen, he said. <\/p>\n
Natural gas<\/h2>\n
Natural gas, meanwhile, finished higher after posting declines over the past three consecutive trading sessions.<\/p>\n
Read:<\/strong> Natural-gas prices have dropped by nearly half this year, despite output risks and higher demand prospects<\/p>\nThe gain for prices of the fuel came despite \u201clackluster temperature outlooks,\u201d said Victoria Dircksen, commodity analyst at Schneider Electric, in a market update.<\/p>\n
She pointed out that the National Oceanic and Atmospheric Administration\u2019s six- to 10-day temperature outlook projects below-average to near-normal temperatures for most of the Southern half of the Lower 48 states, \u201cfailing to boost cooling demand and allow for larger-than-average injections [of natural gas] into storage in the coming weeks.\u201d<\/p>\n
Dircksen also said that the EIA on Thursday is expected to announce a slightly larger-than-normal rise in supplies in its weekly natural-gas report. Supplies for the week ended May 19 likely rose by around 98 billion cubic feet, she said. If confirmed, that would be 2 billion cubic feet more than the five-year average for the same week, she said.<\/p>\n<\/p><\/div>\n
Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Oil futures ended Wednesday at their highest in more than three weeks after the U.S. government reported a more than 12 million-barrel weekly drop in domestic crude inventories \u2014 the largest so far this year. The rise in prices came a day after Saudi Arabia\u2019s energy minister warned of pain ahead for short sellers. Some […]<\/p>\n","protected":false},"author":1,"featured_media":13799,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-13798","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\n
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