Commodity Market: US Crude Oil mostly steady as latest gasoline stock report points to weaker demand at the start of summer

Futures on US West Texas Intermediate Crude Oil remained mostly steady on Thursday after a government report showed an increase in US gasoline stockpiles, implying weaker-than-anticipated fuel demand at the start of the summer driving season.

US crude oil stocks, including the nation’s Strategic Petroleum Reserve (SPR), registered a drop for the eleventh consecutive week as refiners increased production. However, US gasoline stocks rose sharply due to slim consumer demand.

An official report by the US Energy Information Administration showed on Wednesday that crude oil inventories, excluding the SPR, had decreased by 5.241 million barrels during the week ended on June 4th, or at a sharper rate compared to what analysts on average had anticipated – a drop by 2.036 million barrels.

Meanwhile, US gasoline inventories surged by 7.046 million barrels last week, which has been the sharpest increase since April 2020. A consensus of analyst estimates had pointed to a much slower increase – by 0.698 million barrels.

EIA data also showed that implied gasoline demand had shrunk to 8.48 million barrels per day during the week to June 4th from 9.15 million barrels per day in the prior week.

“Markets had been optimistic on demand as the U.S. enters the peak summer driving season,” ANZ Research analysts wrote in an investor note, cited by Reuters.

“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.”

In other news, Libyan company Waha Oil Co seeks to resume normal production operations on Thursday, after fixing a leak on a pipeline that more than halved its output, Reuters reported.

As of 10:28 GMT on Thursday WTI Crude Oil Futures were edging up 0.10% to trade at $70.03 per barrel, while easing from yesterday’s 138-week high of $70.62 per barrel. WTI Crude Oil Futures have risen 5.68% so far in June, following another 4.31% surge in May.

At the same time, Brent Oil Futures were edging up 0.36% on the day to trade at $72.30 per barrel, while easing from yesterday’s 107-week high of $72.85 per barrel. Brent Oil Futures have risen 4.12% so far in June, following another 4.20% surge in May.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $70.01
R1 – $70.57
R2 – $71.17
R3 – $71.73
R4 – $72.28

S1 – $69.41
S2 – $68.85
S3 – $68.25
S4 – $67.64

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $72.24
R1 – $72.65
R2 – $73.25
R3 – $73.66
R4 – $74.06

S1 – $71.64
S2 – $71.23
S3 – $70.63
S4 – $70.02