“Crude oil inventories rose by 2.21 million barrels a week to June 7,” the energy information administration said in a regular weekly schedule.
This was compared with forecasts for a reserve withdrawal of 0.48 million barrels after a 6.77 million barrel growth over the past week.
Compared to expectations for a gain of 0.74 million barrels, the EIA report showed that gasoline inventories increased by 0.76 million barrels, while distillation reserves suddenly decreased by 1 million barrels compared to forecasts for a rise of 1.14 million.
A comment by senior investment analyst Baran Krishnan was, “Another week and another were built on crude oil and gasoline stocks.” “Think, we’re already in June, and despite the refinery going to over 93% and approaching the 95% rate for this time of year, we’re not just looking at the kind of fuel demand we have to take.”
Krishnan noted that despite distillation withdrawal, total oil inventories rose by 9.3 million barrels.
He said, “This is another poor data information that hardly reflects the peak season for oil demand.”
US raw prices declined after release, reaching a low level of $ 51.95 per day. Although recovering some of these losses, it was still below 2.5% at $ 51.95 per barrel by 10:53 ET, compared with $ 52.10 before publishing.
London’s Brent unprocessed revenue fell 2.0% to $ 61.07 a barrel, recovering from an internal level of $ 60.31 in a knee-high reaction to data.
Oil prices have already marked a sharp drop of about 2% ahead of data on signs that a global economic downturn has been fueling increased demand for oil at the lowest in years.
Analysts have also been downsized, while EIA has already cut its forecasts for rising world oil demand in 2019.
Analysts at the Bank of America, Merrill Lynch, said, “Global oil demand growth has been at the weakest level since 2012”.
Analysts who participated in a Reuters oil study may have the best growth forecasts at around 1.4 million bpd versus 1.7 million bpd in a January poll.
The fear of slowing demand among the concerns of a global recession seems to have overcome the main supply factors, such as production cuts led by OPEC or US sanctions against Iran and Venezuela producers.
With OPEC and its allies widely expected to extend the shortened production agreement at the end of the month, Krishnan also suggested that a visit by Japanese Prime Minister Shinzo Abe to Iran could represent another threat to the market for raw pricing.
“The first Japanese Prime Minister to set foot on Iranian soil since the 1979 Islamic Revolution, Abe’s visit will be historic even without what he hopes to achieve: making peace between Tehran and the US. -Iran have rippled across the globe, the consequences followed by the world are oil prices that may be higher than guaranteed for the face, “Krishnan explained.
He added, “Only Iranian oil exports are about a million barrels under capacity due to the US embargo.”
Krishnan said there is a “growing feeling” that US-Iran nuclear negotiations can be proclaimed.
He warned that, “Few things may be more bearish for oil if this happens.”/Investing.com