ICE Brent settled above US$87/bbl for the first time since mid-April yesterday, before giving up some gains in the early trading session today. Oil supply threats in the US due to Hurricane Beryl and a bullish oil inventory report from the EIA helped oil to make strong gains.
Recent reports suggest that the hurricane is now disrupting US oil output, with companies like Shell Plc, BP Plc, and Exxon Mobil Corp evacuating some of their platforms in the Gulf of Mexico. According to the data from the National Hurricane Center and the Bureau of Ocean Energy Management, around 73k b/d of federal offshore oil production is believed to be within the projected path of the storm.
Meanwhile, the weekly inventory report from EIA shows that US commercial crude oil inventories fell by 12.2m barrels over the week, compared to market expectations of a drawdown of just 411k barrels. This was the biggest weekly decline since July 2023. This leaves commercial crude oil inventories at 448.5m barrels, the lowest level since 22 March 2024. Crude oil exports rebounded by 491k b/d week-on-week to 4.4m barrels over the reporting week following the reopening of the Port of Corpus Christi in Texas, the waterway that connects the largest crude-exporting terminals in the country to overseas markets.
In refined products, gasoline stocks fell by 2.2m barrels against a draw of 636k barrels that the market was expecting, while distillate fuel oil stocks decreased by 1.5m barrels over the week (larger than the market expectations for a draw of just 395k barrels). Furthermore, gasoline demand consumption rose on a four-week basis for the first time since July. Refinery activity increased over the week, rising 1.3% to 93.5% as of 28 June 2024.
