0238 GMT: Crude oil futures dropped during Asian morning trading on June 10 amid a significant increase in US inventories, casting doubt on optimism over rising demand in the region in the summer.
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At 10:38 am Singapore time (0238 GMT), the August Brent futures contract on ICE fell 65 cents a barrel, or 0.90%, from a previous estimate of $ 71.57 a barrel, while how the NYMEX crude oil futures contract for July fell 61 cents a barrel. (0.87%) at a price of 69.35 USD / bbl.
The Energy Information Administration reported a 5.2 million barrels cut in US crude oil inventories in the week ending June 4 amid high refining rates, but market sentiment was quelled by a significant 7 million barrels and 4.4 million barrels of gasoline increases. … an increase in distillate stocks over the same period.
In the week ending May 28, US gasoline inventories rose 1.5 million barrels and distillate inventories rose 3.7 million barrels, according to the EIA.
“Refineries pump out a lot of fuel, operating at 91.3% of their operating capacity. The growth in demand for crude oil over the past month has been significant, but it has eased slightly this week, ”said Edward Moya, senior market analyst at OANDA. in a note dated June 10. “Total sales are 5.2 million barrels, up from the expected 2.9 million barrels decline, but everyone seems to be focusing on a surprisingly massive increase in gasoline and distillate inventories.”
The increase in gasoline stocks reflected that the market’s optimistic expectations after Memorial Day weekend – usually marking the start of the summer driving season – did not materialize.
“Crude oil fell after signs of weakening demand … markets were bullish on demand as the US peaked in the summer season,” analysts at ANZ said in a June 10 note.
They said the EIA report showed that weekly gasoline supplies, an indicator of demand, showed the biggest decline since February, adding signals to bearish demand.
However, analysts say the long-term outlook for crude oil continues to be supported by stronger fundamentals as economies around the world embark on a thorny path toward a vaccine-based demand recovery.
“Green sprouts emerge from the devastating defeat of Covid-19[d] “Avtar Sandu, senior commodity manager at Phillips Futures, said in a June 10 note.
The market has been awaiting the June OPEC and International Energy Agency oil market reports due later than June 10 and 11, respectively, for fresh pricing guidance.