On Wednesday, the US Energy Information Administration (EIA) showed that the country’s crude oil and refined products posted sharp falls last week.
In the week to July 10, crude oil inventories in the country plummeted by 7.5 million barrels to 531l7 million barrels, way beyond analysts’ estimates for a fall of 2.1 million barrels. The drop was supported by the significant decline in crude imports by 2 million bpd.
US oil imports from Mexico have gotten back to a more normal level at 490,000 bpd in these past few weeks, ending the unexpected hike to the highest in eight year in the previous period.
Likewise, gasoline stockpiles also rose by 3.1 million barrels in the period when analysts only projected a 643,000 barrel slump. The dip was mainly driven by the renewed lockdowns in more US states as cases and deaths of coronavirus are again spiking.
The overall gasoline supplied in the past four weeks fell by 9% year-on-year.
The distillate inventories also fell by 453,000 barrels, but the inventories in the Gulf Coast soared by a record high by 58.6 million barrels.
Looking ahead, analysts predicted that crude would see more declines in the next few weeks.
Analyst Phil Flynn of Price Futures Group commented, “We will see a tightening of supplies and the market is signaling that we are going to need more oil pretty soon, probably by August.”
Regarding gasoline demand, analyst John Kilduff of Again Capital estimated that it would get worse as the coronavirus situation worsening.
