Oil Falls Despite Moderate Draw In Crude Inventories

Crude oil prices were little changed today after the U.S. Energy Information Administration reported an inventory decline of 3.8 million barrels for the week to June 16.

At 463.3 million barrels, the EIA said, inventories were around the five-year average for this time of the year.

Last week's inventory level change compared with a substantial build of almost 8 million barrels estimated for the previous week.

In fuels, the authority estimated modest inventory builds.

Gasoline stocks added 500,000 barrels in the week to June 16, after a build of 2.1 million barrels for the previous week.

Gasoline production averaged 9.8 million bpd last week, which compared with 10.2 million bpd for the previous week.

Middle distillate stocks rose by 400,000 barrels in the week to June 16, which compared with a build of 2.1 million barrels for the previous week.

Middle distillate production last week averaged 5.1 million barrels daily, which compared with 5 million barrels daily for the previous week, the EIA also said.

Meanwhile, as summer driving season moves into full swing, gasoline prices are on the decline, likely to stimulate greater demand during this peak season.

China's slower than expected recovery, Russia's resilient oil exports and concern about a global recession have all combined to press prices at the pump lower, the Wall Street Journal reported earlier this month.

Speaking of prices, crude oil inched up in the early hours of Wednesday, driven by expectations of a hawkish speech by Fed chair Jerome Powell when he gives his half-year testimony to Congress on Wednesday and Thursday.

"We expect Fed Chair Powell to deliver a hawkish semi-annual testimony to Congress reflecting the FOMC's median projection for higher interest rates in coming months and more resilient inflation in the near term," ANZ said in a note as quoted by Reuters.

At the time of writing, Brent crude was trading at $75.05 per barrel, with West Texas Intermediate at $70.46 per barrel, both down by close to 3% from opening.

By Irina Slav for Oilprice.com

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