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Oil Down Over U.S.’ Weaker-Than-Expected Fuel Demand

CommoditiesJun 10, 2021 14:55
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By Gina Lee – Oil was down Thursday morning in Asia as the U.S. posted high amounts of gasoline stocks, indicating a weaker-than-expected fuel demand at the start of the country’s peak summer travel season.

Brent Oil Futures fell 0.69% to $71.72 by 12:16 AM ET (4:16 AM GMT) and Crude Oil WTI Futures were down 0.69% to $69.48.

Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration (EIA) showed a draw of 5.241 million barrels for the week ending June 4. Forecasts prepared by predicted a 2.036 million-barrel draw, while a 5.080 million-barrel draw was recorded during the previous week.

Crude oil supply data from the American Petroleum Institute, released the day before, showed a draw of 2.108 million barrels.

"Markets had been optimistic on demand as the U.S. enters the peak summer driving season…an acceleration in (COVID-19) vaccinations and rising traffic numbers are a plus for demand for transportation fuel. However, this data highlights it won't be a smooth road back to recovery." analysts from ANZ Research said in a note on Thursday.

U.S. oil stockpiles, including the Strategic Petroleum Reserve (SPR), decreased for the 11th consecutive week as refiners boosted output. However, fuel inventory surged due to weak consumer demand, the Energy Information Administration said on Wednesday.

Meanwhile, Libya's Waha Oil Co is reportedly set to return to normal output operations on Thursday after fixing a leak on a pipeline. The leak, reported on Monday, reportedly led to a fall of oil production to 130,000 barrels per day on Wednesday, from 285,000 bpd a day earlier.

On the demand front, India, the third-largest oil consumer, posted its lowest fuel demand level in May since August 2020, as the economic activities are restricted in the country due to the ever-rising numbers of COVID-19 cases which topped 29 million as of June 10.

Oil Down Over U.S.’ Weaker-Than-Expected Fuel Demand

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