refinery use fell 0.9% to 93.4%, which helps “explain the notably smaller than expected drawdown in oil stockpiles,” said Sevens Report Research’s Richey. Read: Here’s what might lead to a 10% spike in retail gasoline prices Analysts had forecast weekly inventory declines of 2 million barrels for gasoline and 2.3 million for distillates.

The EIA report also revealed supply falls of 800,000 barrels for gasoline and 200,000 barrels for distillates for the week. The American Petroleum Institute late Tuesday reported a weekly increase of 1.3 million barrels, according to a source citing the data. On average, analysts polled by S&P Global Commodity Insights expected the report to show a decrease of 4.4 million barrels. commercial crude inventories fell by 600,000 barrels for the week ended July 21. The Energy Information Administration on Wednesday reported tha t U.S. However, “if we see Fed policy expectations take a hawkish shift and hard-landing/recession fears return, then we expect pain in energy markets as risks to consumer demand would be quickly repriced into the market,” he said. “As long as the market is right and the Fed will both achieve a soft economic landing and begin easing policy rates in the quarters ahead,” which is something we don’t anticipate, said Richey, then oil can “extend this mid-summer rally.” “That lack of faith is underscored by Fed funds futures pricing in a more than 50% chance of a rate-cut by the end of Q1 since the Fed announcement,” he said.įed Chairman Powell said that depending on economic data, it was “certainly possible” the Fed would delivery another rate hike in September, or hold steady. While the Fed is “continuing to say they are prepared to raise rates further and keep policy restrictive for a prolonged period of time, the markets simply don’t believe that,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.

It also said it was prepared to do more to bring “elevated” inflation down. central bank raised its benchmark interest rate by a quarter-percentage point to a 22-year high. Upside for oil, however, has been limited by fears of aggressive monetary tightening by global central banks that could spark a significant economic slowdown. Given ongoing cuts by Saudi Arabia, and the Atlantic hurricane season, strength in the energy complex is likely to continue in the days and weeks ahead, said Tariq Zahir, managing member at Tyche Capital Advisors. Prices had been supported by expectations for a supply deficit in the second half of the year. Rose 1.9% to $2.91 a gallon, while August heating oilįell 2.4% to $2.67 per million British thermal units ahead of the contract’s expiration at the end of Thursday’s session.īoth WTI and Brent retreated Wednesday from Tuesday’s settlement at their highest prices since April 18. The most actively traded contract, declined 69 cents, or 0.8%, to $82.56 a barrel. The global benchmark, lost 72 cents, or 0.9%, at $82.92 a barrel on ICE Futures Europe. West Texas Intermediate crude for September deliveryįell 85 cents, or 1.1%, to settle at $78.78 a barrel on the New York Mercantile Exchange.

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