Gasoline inventory was also up by 3.3m barrels, diverging widely from the estimated 275,000-barrel decline. That contradicted the drop of 4.6 million barrels for the week reported by the American Petroleum Institute late Tuesday-and was in contrast to the fall of 3.5 million barrels expected by analysts polled by S&P Global Platts. Libya’s Sharara oil field, which had been pumping 270,000 barrels a day, was forced to halt Wednesday because of worker protests.
Middle East tensions, however, have eased over the past few days, as Kuwait oil minister Essam al-Marzouq quelled fears about a potential disruption to the Opec led deal, insisting that Qatar was committed to the Opec agreement to restrict supply.
The drop also comes at the start of the Western Hemisphere’s busiest period for fuel consumption, the summer driving season.
If Qatar is shunned, what reason does it have to stick to its agreed crude oil production levels?
The price of Brent Crude fell 4.1% to $48.06 a barrel, its lowest level since November while West Texan Intermediate declined 5.1% to $45.72 a barrel.
Elastic domestic production along with cheap and abundant storage capacity in the United States is central to our long-held view that the USA will be the last of the major regions to rebalance inventories. Placed in two trades, the transactions were especially large given they were to purchase crude at 66 percent above the day’s closing price. Overall exports fell to 557,000 bbl/d from a record 1.3 million bbl/d the week previous.
USA crude oil prices recovered to trade roughly flat on Thursday, after falling to levels that put the commodity on track for its lowest close in more than six months.
Shares of Exxon Mobil (XOM) dipped 0.2% to 81.04 in premarket trading on the stock market today. Over the past 12 months, Exxon stock has traded down about 11%. Chevron (CVX) was unchanged. As of last night’s close, Chevron shares have added less than 0.1% over the past 12 months.
According to Vivek Dhar, mining and energy analyst at the Commonwealth Bank, this saw concerns surrounding oversupply in the USA market intensify, leading to the enormous selloff in WTI crude futures.