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Petroleum industry

Crude Oil Prices Fall Amid Surprising Gasoline Stockpiles Increase

Strategic Insights

— 2 min read

Crude oil prices extended their losses after the U.S. government reported a significant increase in gasoline stockpiles, exceeding analysts' expectations. Light, sweet crude for July delivery fell 93 cents, or 1.3%, to $69.54 a barrel on the New York Mercantile Exchange. The Energy Information Administration stated that U.S. crude-oil stockpiles fell by 3.9 million barrels to 357.7 million barrels in the week ended June 12, while gasoline stockpiles increased by 3.4 million barrels. The market's focus on the larger-than-expected gasoline build led to the decline in oil prices.

Key Takeaways:

  • The U.S. Energy Information Administration reported a 3.9 million-barrel decrease in crude-oil stockpiles to 357.7 million barrels in the week ended June 12, exceeding analysts' expectations of a 1.7 million-barrel drawdown.
  • Gasoline stockpiles increased by 3.4 million barrels, offsetting the decline in crude-oil stockpiles, as refineries kept operating rates steady and gasoline demand rose by 213,000 barrels a day.
  • Light, sweet crude for July delivery fell 93 cents, or 1.3%, to $69.54 a barrel on the New York Mercantile Exchange, while Brent crude on the ICE Futures exchange fell 78 cents to $69.46 a barrel.
  • The market's focus on the larger-than-expected gasoline build led to the decline in oil prices, according to Mike Zarembski, senior commodities analyst at OptionsXpress in Chicago.
  • Oil prices have fallen four consecutive days, pressured by a strengthening dollar and weaker stock markets.
  • U.S. consumer prices rose a mere 0.1% in May from April and fell 1.3% compared with a year ago, the largest 12-month decline since April 1950, which may indicate a slowdown in inflation.

Statistics:

  • Crude oil prices fell 93 cents, or 1.3%, to $69.54 a barrel on the New York Mercantile Exchange.
  • Brent crude prices fell 78 cents to $69.46 a barrel on the ICE Futures exchange.
  • Gasoline stockpiles increased by 3.4 million barrels, offsetting the decline in crude-oil stockpiles.
  • Refineries kept operating rates steady, while gasoline demand rose by 213,000 barrels a day.
  • U.S. consumer prices rose a mere 0.1% in May from April and fell 1.3% compared with a year ago, the largest 12-month decline since April 1950.

Sources:

  • Dow Jones Commodities News via Comtex, June 17, 2009
  • Dow Jones Newswires, June 17, 2009
  • OptionsXpress, Mike Zarembski, senior commodities analyst, Chicago
  • U.S. Energy Information Administration
  • U.S. Labor Department
  • Royal Dutch Shell PLC (RDSA)
  • Dow Jones & Company, Inc.

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