Crude oil futures prices fell sharply on Thursday (21st),WTI CrudeFutures settled at a one-week low, as U.S. gasoline inventories rose off-season, reflecting lower demand.
On the same day, natural gas futures prices fluctuated and closed lower. Although Russia resumed the supply of natural gas to Western Europe, official US data showed that the increase in natural gas inventories last week was lower than expected.
energy commodity prices
- Delivered in September WTI CrudeFutures fell $3.53, or 3.5 percent, to settle at $96.35 a barrel, the lowest close for the front-month contract since July 14.
- Delivered in September Brent CrudeFutures fell $3.06, or 2.9 percent, to settle at $103.86 a barrel, the lowest close for the front-month contract since July 15.
- Gasoline futures for August delivery fell 3.8% to settle at $3.1495 a gallon.
- Delivered in AugustThermal Fuel FuturesPrices fell 0.4 percent to settle at $3.5903 a gallon.
- Natural gas futures for August delivery slipped 0.9% to settle at $7.932 per million Btu.
Natural gas futures rose more than 10 percent on Wednesday to close above $8 per million Btu, the highest close since June 13 for most recent-month natural gas futures.
market driving force
Crude oil and petroleum product futures fell further following data from the U.S. Energy Information Administration showed that U.S. gasoline inventories unexpectedly rose by 3.5 million barrels last week (up to 7/15), far exceeding analysts’ expectations for an increase of 400,000 barrels. What’s more, the operating rate of refineries fell to 93.7% last week from 94.9% a week ago, but it still ushered in an increase in gasoline inventories.
During the US summer driving season (which runs from the Memorial Day holiday in late May to the Labor Day holiday in early September), gasoline supplies have actually increased, which is seen as a rather negative development.
“Furthermore, gasoline supply, a measure of implied demand, rebounded by only 459,000 barrels per day to 8.52 million barrels per day last week,” Sevens Report Research said. Today, the biggest drop since the start of the COVID-19 lockdown.” Data like this continues to show that soaring oil prices have wrecked consumer demand as inflation continues to weigh on their personal balance sheets.
Meanwhile, Libya’s National Oil Company said on Wednesday it was preparing to export crude oil following the force majeure at its terminals and fields was lifted.
In general, “oil traders have seen a number of negative factors: increased supply from Libya and Russia, continued blockades in China, and a possible drop in U.S. demand,” said Manish Raj, chief financial officer at Velandera Energy Partners. There were also pre-2008, he said. The same is true, when staggering oil prices dampened demand for oil and sent prices plunging, so traders were leaning toward staying on the sidelines until the demand picture became clearer.
However, “all is not lost because there is a feud between the physical market being exceptionally tight and the speculators’ perception of a looser outlook. History has shown that the physical market will eventually outperform the speculative trader because the physical market is where oil changes hands. the only place,” Raj said.
Natural gas ends lower following hitting 5-week high
The Nord Stream 1 pipeline, which transports gas to Europe, was previously closed for maintenance, but Russia resumed the main pipeline on Thursday. However, it is unknown whether Russia will maintain transmission, and with winter approaching, Western European countries continue to worry regarding gas shortages.
The European Commission proposed Wednesday for member states to reduce natural gas use by 15 percent in the coming months to avoid winter disruptions that hit key industries once more.
Risk consultancy Eurasia Group sees a 60 percent chance of Russia continuing to cut gas supplies to the EU, a 30 percent chance of expanding the cuts, and a 10 percent chance of returning to normal supply levels.
Henning Gloystein, director of energy, climate and resources at Eurasia Group, wrote in the report: “Even if Nord Stream 1 returns to normal supply levels, Russia may cut supply elsewhere, possibly through the Ukrainian pipeline. This strategy may be aimed at At the expense of the European economy in retaliation for its sanctions, while generating revenue for its own country, Russia’s current partial cuts might mean around 90 bcm of gas flowing to the EU for the whole of 2022, down from 155 bcm in 2021. “
Meanwhile, the EIA announced on Thursday that natural gas inventories rose by 32 billion cubic feet (bcf) last week (end 7/15), below analysts’ expectations, prompting natural gas futures to briefly hit $8 per million Btu.
