A Decline Noticed in Commercial Crude Oil Inventories

Fuel Oil

19 Sept 20242 Min ReadDaily Market Report

Demand and inventory are a topic of concern for oil amidst refiners in Europe cutting rates due to poor margins. Decreased crude oil inventory in the US is another concern. Check the report below for detailed update on petroleum market update.

Petroleum Prices

Oil prices fell in Asian trading on Thursday after a larger-than-expected Federal Reserve interest rate cut sparked concerns about the U.S. economy.
Brent crude futures for November fell 34 cents, or 0.46%, to $73.31 a barrel by 0015 GMT, while WTI crude futures for October declined to $70.49 a barrel, down 42 cents or 0.59%. MCX Crude oil prices opened at 5937 with a gain of 0.41%.

Petroleum Demand & Supply

Weak demand from China’s slowing economy also continued to weigh.
Refinery output in China slowed for a fifth month in August, statistics bureau data showed over the weekend.
China’s industrial output growth also slowed to a five-month low last month, and retail sales and new home prices weakened further. However, Citi analysts said Chinese oil demand may rebound by 300,000 barrels per day year-on-year in the fourth quarter on improved independent refinery runs and the start-up of new refiner Shandong Yulong Petrochemical, offering some support to global demand.

Petroleum News

This week's Energy Information Administration (EIA) report took a back seat to the FOMC, as US commercial crude oil inventories posted a tenth draw in the past 12 weeks, sending stockpiles to a one-year low.
Of particular interest to futures traders, the Cushing storage hub accounted for all of the net decrease as the delivery point for the NYMEX WTI contract slumped 2 million to 22.7 million barrels.
Analysts said this is helping to support the Oct/Nov WTI spread at around $1/b, while Nov/Dec was at around $0.80/b.
Cushing stockpiles were drained to a nine-year low of 21 million barrels last year, which at the time analysts warned was close to the minimum operational levels needed to keep volumes flowing efficiently and maintain the quality of WTI.
Elsewhere, oil investors have so far shrugged off growing Middle East tensions as Israel targeted Hezbollah for a second day, this time remotely detonated walkie-talkies.

Expert Opinion

For oil, that means attention will likely turn back to demand worries. China has obviously been the key concern when it comes to demand, but there have also been reports of refiners in Europe cutting run rates due to poor margins. Meanwhile, the data released by the US EIA (Energy Information Administration) for the week ending September 13 showed a decline in crude oil inventories in the US. According to the US EIA, commercial crude oil inventories decreased by 1.6 million barrels from the previous week. At 417.5 million barrels, US crude oil inventories were about 4 per cent below the five-year average for this time of year. Total motor gasoline inventories increased by 0.1 million barrels from last week and were slightly below the five-year average for this time of year.