Crude stockpile declines again for the sixth consecutive week, showing that the improvement in demand might linger for longer.
In the latest report from the American Petroleum Institute, inventories for black gold stalled by 8.2 million barrels last week.
This is one of the biggest declines recorded so far. On the other hand, gasoline inventories failed to jump into the bandwagon.
For the period ending June 24, gasoline stockpiles hiked by 1.3 million barrels. This extends the 1.0 million barrels of addition recorded in the previous week.
Similarly, distillate products followed the downtrend and hiked by 400,000 barrels.
This shows that even when the recovery in demand is evident, the effect remains unequal to all products.
The news instantly lifted Brent crude by 0.1%, translating to a net change of $0.74. The European benchmark currently exchanges hands at $74.76 per barrel.
This nurses the painful blow it suffered from during Tuesday’s session where it shed off 2% from its price level.
Moreover, the West Texas Intermediate added 0.7% to $73.47 a barrel during the same session. It recorded an intraday low of $73.31 per barrel before the news provided some support.
Both benchmarks are set to wrap up this month with their third steady monthly gain for the year.
Much of the support came from the continued vaccination progress across the world, especially in the world’s leading economies.
The vaccination progress in the United States alone paved the way to the reopening of the services sector, therefore stimulating demand for crude.
OPEC Decision Will Remain King
Analysts and investors alike wait for OPEC’s production decision for August to dictate the trajectory of the crude market.
Experts in the field noted that the oil association might stick to its supply curb decision for longer.
This is due to the emergence of another risk by the Delta variant of the Covid-19 pandemic. The new strain has silently penetrated the oil continent and is slowly wreaking havoc across countries.
OPEC Ministers delayed the official decision until Thursday. This is for the reason of failing to reach a concession during the start of the alliance meeting held on Tuesday.
On the other hand, some representatives already hinted that the risk is not officially out of the picture. This ignites expectations that the policymakers might stick to their hardline supply curbs for now.
However, commodity experts noted that there might be some unexpected tweaks to emerge. In an estimate, analysts expect OPEC to increase output by 500,000 barrels/day to 1 million barrels/day in August.