After the U.S Government announced last week a sharp increase in oil reserves, futures on crude oil closed on Wednesday with a slight decline. The decline was quite modest as the data also showed a decrease in petroleum reserves.
At the close of NYMEX trading, WTI oil futures decreased 9 cents (0.1%) to $88.81 per barrel. At the close of ICE trading, Brent oil futures increased 62 cents (0.5%) to $114.64 per barrel.
According to the data released by the U.S. Department of Energy (DOE), petroleum reserves jumped 5.3 mln barrels last week. Refining capacity usage decreased 1.1 ppt. Petroleum reserves lost 2.8 mln barrels which supported petroleum prices and prevented them from a decrease. DOE indicator of petroleum demand advanced 2.4%. According to the data, distillates reserves went up 400 000 barrels including fuel oil and diesel oil.
Analytics expected 200 000 barrels growth of oil reserves, one million barrels decrease of petroleum reserves, and 700 000 barrels rise of distillates reserves.
Normally, a significant growth of oil reserves influences oil prices, but this time its influence was moderated by a slump of petroleum reserves and an increase of petroleum demand.
Market actors monitor weekly data releases on DOE reserves to follow oil supply and demand in the U.S., the largest oil consumer worldwide. The U.S. oil demand and its economic climate are increasing their influence on oil market against the escalating concerns of possible recovery slowdown.
However, a hurricane in the Gulf of Mexico may break oil extraction and encourage increase of prices. According to the National Hurricane Center, there is a 30% chance that a “tropical wave” in the Caribbean may develop into a hurricane within 48 hours.
Wednesday’s moderate decrease shows that NYMEX quotes on oil futures dropped 7.2% in August. Futures stay below their maximum level of approximately $115 per barrel reached in May.
