Oil Stocks- Oil Futures Ease After Data Fans Worry Over Summer Demand
Weighed down by the bearish data, NYMEX July RBOB gasoline contact declined 1.65 cents on the session to $2.2025 gallon and the front-month ULSD contract fell 0.55 cents to $2.1295. NYMEX July West Texas Intermediate fell below $70 bbl for a $69.96 bbl settlement, while the international crude benchmark contract for August delivery settled flat at $72.22 bbl.
Offsetting losses for crude futures, inventory data showed U.S. commercial crude oil supplies dropped a larger-than-expected 5.2 million bbl during the week of June 4 following a draw of similar size in the week prior. At 474 million bbl, commercial crude oil stocks have now fallen about 4% below the five-year average. The draw was realized as refiners hiked run rates to the highest daily rate in 18 months at 91.6%.
Earlier in the session, oil futures traded modestly higher amid signs that some countries in the European Union and North America are prepared to ease COVID-19 travel restrictions that are seen boosting demand for jet fuel and overall economic activity. Canada on Wednesday announced it would lift quarantine protocols for fully vaccinated travelers starting in early July.
“The first step … is to allow fully vaccinated individuals currently permitted to enter Canada to do so without the requirement to stay in government-authorized accommodation,” Health Minister Patty Hajdu told reporters on Wednesday.
Many EU area countries are now open for tourism for fully vaccinated travelers, some only to other EU countries and some to anyone with a negative COVID-19 test result. Many more countries are expected to announce further re-openings throughout June and July.
This week, the Biden administration said it is forming expert working groups with Canada, Mexico, the EU, and the United Kingdom to determine how best to safely restart travel after 15 months of pandemic restrictions.
Restart of international travel is seen as critical to a recovery in global oil demand, with jet fuel consumption lagging far behind that of gasoline and diesel fuels. EIA projects global oil demand to average 97.67 million bpd before breaching 100 million bpd in 2021.
Liubov Georges can be reached at [email protected]