Oil Price Fundamental Daily Forecast – Global Demand Worries, Surprise Rise in US Crude Stocks Weigh on Prices

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading sharply lower late in the session on Wednesday as India’s COVID-19 surge dented demand and a rise in U.S. crude and gasoline stocks reminded traders of on-going supply issues.

At 19:08 GMT, June WTI crude oil futures are trading $61.09, down $1.58 or -2.52% and June Brent crude oil futures are at $65.07, down $1.50 or -2.25%.

India’s COVID-19 Surge Dents Demand Outlook

Crude oil started the day on a weak note on Wednesday on concerns surging COVID-19 cases in India will drive down fuel demand in the world’s third-biggest oil importer.

India, the world’s third-largest oil user, on Wednesday, reported another record increase in the daily death toll from COVID-19.

US Crude and Gasoline Stocks Edge Up, Distillates Draw Down

U.S. crude oil stockpiles unexpectedly edged higher last week, while distillate inventories fell and gasoline stocks built modestly as refining rates held steady, the Energy Information Administration said on Wednesday.

Crude inventories rose by 594,000 barrels in the week to April 16 to 493 million barrels, compared with analysts’ expectations in a Reuters poll for a 3 million-barrel drop. East Coast inventories, however, fell to a record low at 7.9 million barrels.

Refinery utilization rates were unchanged at 85% of overall capacity, but Gulf Coast refiners boosted capacity to their highest levels since March 2020, as demand for fuel improves.

U.S. gasoline stocks rose by 86,000 barrels in the week to 235 million barrels, the EIA said, compared with analysts’ expectations for a 464,000 million-barrel rise.

Distillate stockpiles, which include diesel and heating oil, fell by 1.1 million barrels to 142.4 million barrels, versus expectations for a 956,000-barrel drop, the EIA data showed.

Net U.S. crude imports fell last week by 416,000 barrels per day, the EIA said.

Daily Forecast

The EIA report is mildly disappointing due to the unexpected build in crude stocks. Gasoline product supply rose slightly, but traders said that was to be expected, ahead of the summer driving season. Meanwhile, jet fuel supplied dipped. After the reopening of global economies drove up demand for jet fuel as air travel increased, rising COVID-19 cases are now renewing talk for fresh lockdowns in certain parts of the global economy.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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