Crude Oil Futures Slip as US Stockpiles Rise, Analysts Eye Summer Demand

The prices of energy commodities experienced fluctuations today as inventories and demand outlooks influenced market sentiments.

Oil prices edge lower as rising US crude

• West Texas Intermediate (WTI) August Contract: The price stood at $80.47 per barrel, marking a decrease of 36 cents, or 0.47%. Notably, year to date, U.S. oil has seen a rise of 12.1%.
• Brent August Contract: The price was recorded at $84.76 per barrel, showing a decline of 25 cents, or 0.29%. Over the course of the year, the global benchmark has advanced by 9.8%.
• RBOB Gasoline July Contract: Gasoline prices reached $2.50 per gallon, indicating an increase of 0.27%. Year to date, gasoline has witnessed a substantial gain of 19.2%.
• Natural Gas July Contract: The price was noted at $2.66 per thousand cubic feet, reflecting a decrease of 3.3%. Year to date, natural gas has moved ahead by 6%.

Inventories and Analyst Expectations

The Energy Information Administration released data revealing that crude oil stockpiles experienced a notable increase of 3.6 million barrels in the past week, contrary to analysts' expectations of a 2.9 million barrel decrease. Similarly, gasoline stockpiles surged by 2.7 million barrels, while analysts had anticipated a drawdown of 1 million barrels. These rising inventories of crude oil and gasoline indicate potential softness in demand.

Market Sentiments and Global Dynamics

Recent market movements have seen a pause in the rally, yet both West Texas Intermediate and Brent have achieved gains of 4.2% and 3.55% for the month, respectively. Analysts are anticipating a resurgence in summer fuel demand following a subdued start to the season.

"The ubiquitous view is that demand will increase during the summer and with OPEC+ cuts fully in place until October global and OECD stocks ought to deplete," stated John Evans, analyst at oil broker PVM.

Additionally, market participants are closely monitoring the geopolitical landscape, particularly the situation at the Israel-Lebanon border. Tensions between Israel and the Iran-backed militia group Hezbollah have escalated, raising concerns about the potential for conflict that could impact crude oil supplies.