U.S. Oil Inventories Expected to Register Eighth Consecutive Weekly Drop

Crude oil inventories in the United States are expected to further drop, with official data due on Wednesday by the U.S. Department of Energy’s Energy Information Administration (EIA).

Last week, data showed that U.S. oil stockpiles declined for the seventh consecutive week by 6.866 million barrels. A drop that exceeded most market expectations of a 4.033 million-barrel decline.

Gasoline stockpiles decreased by 1.5 million barrels, while distillate inventories rose by 1.616 million barrels. Data were released on Thursday instead of Wednesday as usual, as markets were off on Monday, due to the Independence Day holiday.

Meanwhile, a survey of market experts by The Wall Street Journal showed that the majority of 11 analysts think U.S. oil inventories are expected to have decreased by 4 million barrels in the week to July 9. The survey is forecasting a decline in the range between 1.6 million barrels and 7.4 million barrels.

On the other hand, gasoline stockpiles could fall by 1.8 million barrels on a weekly basis, with the drop estimates ranging from 5 million barrels to a rise of 2.5 million barrels.

As for distillates inventories, including diesel and heating oil, might have risen by 900,000 barrels, with the forecasts ranging from a drop of 1 million barrels to an increase of 3 million barrels.

Data by the American Petroleum Institute (API) showed late Tuesday that U.S. crude supplies are projected to have fallen by 4.1 million barrels last week.

The API also estimates a decline in gasoline inventories by about 1.6 million barrels, while distillate stockpiles increased by 3.7 million barrels.

Today, Brent crude for September delivery rose by $1.33, or 1.77%, to settle at $76.49 per barrel, registering its best closing level since July 5 and the second highest in 2021, with a year-to-date increase of $24.69 or 47.66%.

In the New York Mercantile Exchange (NYMEX), the West Texas Intermediate futures for August delivery gained $1.15, or 1.55%, to finish at $75.25 per barrel. This marked the highest settlement for the NYMEX futures since October 3, 2018, bringing the gains of the U.S. Crude benchmark contract to a little over 55% since the beginning of the year.