Crude oil futures were little changed on Wednesday even as large drawdown in U.S. stockpiles signaled an uptick in demand ahead of the Fourth of July.
U.S. crude oil inventories fell by 12.2 million barrels last week, according to the Energy Information Administration. Gasoline stockpiles declined by 2.2 million barrels.
Here are today’s energy prices:
- West Texas Intermediate August contract: $82.88 per barrel, up 7 cents. Year to date, U.S. oil has gained 15.6%.
- Brent September contract: $86.31 per barrel, up 5 cents. Year to date, the global benchmark is ahead by 11.9%.
- RBOB Gasoline August contract: $2.55 per gallon, down 0.68%. Year to date, gasoline is up 21.54%.
- Natural Gas August contract: $2.46 per thousand cubic feet, up 1.36%. Year to date, gas is down 1.8%.
Matt Smith, lead oil analyst at Kpler, said the market was expecting a large drawdown ahead of the report due to strong crude exports recently.
“Both gasoline and distillates also showed draws despite higher refinery runs, with implied demand higher for both—particularly for gasoline—as gas stations stocked up ahead of the Independence Day holiday weekend,” Smith said.
Gasoline prices are averaging $3.51 per gallon ahead of the Fourth of July, up about 2 cents from last week, according to the motorist association AAA. Some 60 million Americans, a record, are expected to hit the road for the holiday, according to AAA.
wti vs brent
Patrick De Haan, head of petroleum analysis at GasBuddy, said prices have been inching up ahead of the holiday as crude has gained $10 in the last couple weeks, though gasoline demand still remains a bit soft.
West Texas Intermediate and Brent hit two-month intraday highs Tuesday on fears that Hurricane Beryl could hit Gulf Coast oil infrastructure. Prices ultimately closed lower, however, as the storm is expected to weaken into a tropical storm before potentially hitting south Texas as early as Sunday.
John Evans, analyst at oil broker PVM, said a storm price premium largely eroded given Beryl is expected to weaken, but the big draw in crude inventories “might just have saved more of a sell off after the hurricane news.”
Helima Croft, global head of commodity strategy at RBC Capital Markets, said the impact of hurricanes on the oil market has become less clear as the U.S. is no longer as dependent on offshore oil production. Refinery shutdowns could be a bearish event by restricting demand.
“We used to think about hurricanes as unquestionably a potential bullish near-term development for oil markets, now the picture is not so clear,” Croft told CNBC’s “Last Call” on Tuesday evening.
