U.S. commercial crude oil reserves rose sharply last week, surprising analysts who expected a small reduction, according to figures released Wednesday by the U.S. Energy Information Administration (EIA).
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During the week ended July 29, commercial stocks of black gold rose by 4.5 million barrels to 426.6 million while forecasts were for a decline of 1.5 million. Those of gasoline increased slightly by 200,000 barrels against an expected reduction of 1.5 million as well.
“The demand for gasoline has been very weak”
An increase in crude imports, a drop in exports, a declining refinery capacity utilization rate – due in particular to maintenance work – explain this unexpected increase in crude inventories. “But one of the most important numbers that the market will focus on is that gasoline demand has been very weak.“Reacted Andrew Lebow, of Commodity Research Group. It fell by 704,000 barrels per day to 8.5 mbd. “It’s really bad: gasoline demand for July was particularly disappointing“, underlined the analyst while the market was betting on the contrary on a strong travel season in the United States this summer after the extinguisher of the pandemic. “A fall in demand for fuels has a downward consequence on the market“, commented Andrew Lebow again.
Crude prices fell immediately after the release of these figures. The barrel of Brent from the North Sea for delivery in October dropped 2.24% to 98.29 dollars around 3:20 p.m. GMT. A barrel of US West Texas Intermediate (WTI) for September delivery fell 2.10% to 92.35 dollars.
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