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Futures Movers: Oil edges lower as traders focus on U.S. gasoline demand


Oil futures traded lower Thursday, extending the previous session’s decline, as investors assessed disappointing data on U.S. gasoline usage and kept an eye on surging COVID-19 infections in India.

West Texas Intermediate crude for June delivery


fell 55 cents, or 0.8%, to $65.08 a barrel on the New York Mercantile Exchange. July Brent crude

the global benchmark, lost 52 cents, or 0.8%, to trade at $68.44 a barrel on ICE Futures Europe.

The Energy Information Administration on Wednesday reported a much-larger-than-expected drop in crude inventories of 8 million barrels. But oil prices struggled after the release of the data, which also showed gasoline supplies unexpectedly rose by 700,000 barrels.

Weakness was also seen after the EIA data showed finished motor gasoline supplied, the EIA’s demand indicator, fell by 12,000 barrels to 8.864 million barrels, said Robert Yawger, director of energy futures at Mizuho Securities, in a note.

“Many analysts are looking for demand to increase as the economy starts to open up…that did not happen for the second week in a row,” he wrote.

Gasoline had been leading the rally in the energy complex and will need to find its footing “for the market to supersize the upside in coming weeks,” he said.

Gasoline futures gave up gains to end near unchanged Wednesday. The June contract

was down 1.3% at $2.12 a gallon in Thursday dealings. June heating oil

fell 0.5% to $1.99 a gallon.

Still, Robbie Fraser, global research & analytics manager at Schneider Electric, pointed out that U.S. refineries have “moved above their five-year average run rates for the first time during the COVID-era, after emerging from a very limited maintenance reason.” That may be “promising” for crude longer term, he said in a note.

“Refinery utilization rates typically peak during the Northern Hemisphere summer as travel demand for products like jet fuel and gasoline picks up,” said Fraser.

Oil had climbed Wednesday ahead of the EIA data, buoyed by optimism over U.S. fuel demand and the prospect of easing restrictions in Europe.

Meanwhile, traders are also keeping an eye on India, where the number of new confirmed cases on Thursday exceeded 400,000 for the second time since the surge began last month. The 412,262 cases pushed India’s tally to more than 21 million. The Health Ministry also reported 3,980 deaths in the last 24 hours, bringing the country’s total to 230,168. Experts believe the number of cases and deaths in India have both been undercounted.

India is the world’s third-largest oil importer. News reports said Saudi Arabia lowered its official selling price for crude to Asia and Europe, a move that may have been partly in response to the continued rise in cases in India, wrote analysts at Commerzbank, in a Thursday note.

“The official selling prices (OSP) for U.S. customers have risen to their highest level since November,” they said. “Saudi Arabia clearly envisages different prospects for these markets, in other words.”

Back on Nymex, prices for natural gas made only modest moves after the EIA on Thursday said that domestic supplies of natural gas rose by 60 billion cubic feet for the week ended April 30. On average, analysts forecast an increase of 51 billion cubic feet, according to a poll conducted by S&P Global Platts.

June natural gas

was at $2.94 million British thermal units, up nearly 0.1%.

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