SULAIMANI (ESTA) — Oil prices dropped on Thursday as inventory data in the United States showed a surge in gasoline stocks that indicates weaker-than-expected fuel demand at the start of summer.
Brent crude futures were down 38 cents at $71.84 a barrel by 0650 GMT, while U.S. oil futures declined by 36 cents at $69.60 per barrel.
“Markets had been optimistic on demand at the U.S. enters the peak summer driving season,” Reuters quoted analysts from ANZ Research as saying.
“An acceleration in [coronavirus] 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.”
U.S. crude oil stockpiles that include the Strategic Petroleum Reserve (SPR) fell for the 11th straight week as refiners ramped up output, according to the Energy Information Administration (EIA).
Fuel inventories, however, grew sharply due to weak consumer demand, Reuters reported.
Crude inventories that exclude the SPR fell by 5.2 million barrels in the week to June 4 to 474 million barrels, the third consecutive weekly drop, Reuters said. But fuel stocks were up sharply, with product supplied falling to 17.7 million barrels per day (bpd) versus 19.1 million the week before.
Gasoline demand fell to 8.48 million barrels per day (bpd) in the week to June 4, down from 9.15 million bpd from the week before, but up from 7.9 million bpd a year ago, the EIA data showed.