Crude oil futures closed lower on Wednesday (July 20) after U.S. gasoline inventories rose more than expected last week. This indicates weaker demand in the U.S. Investors are also concerned that central bank rate hikes could slow the economy and hurt demand for oil.
- WTI crude futures were down $1.96, or 1.9%, at $102.26 a barrel.
- BRENT crude futures were down 43 cents, or 0.4%, at $106.92 a barrel.
According to the U.S. Energy Information Administration (EIA), gasoline inventories rose by 3.5 million barrels last week. This was 400,000 barrels more than analysts had expected.
Robert Yawker, an energy analyst at Mizuho, said the rise in gasoline inventories is a worrisome factor in the market. It is believed that part of the reason Americans are using less gasoline is the sharp rise in prices. Last June, gasoline prices jumped at the pump, reaching an all-time high of $5/gallon.
According to EIA data, crude oil inventories fell by 400,000 barrels last week. Refined oil inventories, including heating oil and diesel, fell by 1.3 million barrels.
The oil market was also pressured by fears that central banks around the world would raise interest rates to curb inflation. This could lead to a slowdown in the global economy and affect oil demand.
Russia is expected to resume delivery of natural gas to Europe via the Nord Stream 1 pipeline after maintenance work is completed on July 21. Previously, it was feared that Russia would not supply gas to Europe even after the completion of maintenance work on that day.
Russia will resume normal gas supplies to the EU, but less than 160 million cubic meters per day, which corresponds to the level of gas transport at the full potential.
The Nord Stream 1 pipeline supplies more than a third of Russia’s gas to Europe. It has been undergoing annual maintenance since July 11 and is scheduled for completion on July 21.
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Thursday, July 21, 2022