U.S. West Texas Intermediate crude oil futures are trading lower on Friday, putting the market in a position to close lower for the first week in three. The market has been trading inside a narrow range for two straight weeks.
Crude is likely being propped up by consecutive weekly inventory drawdowns, but gains have been limited by demand concerns in the wake of the Fed’s gloomy outlook for the economy and OPEC’s dismal prediction for demand.
This week’s biggest influences on the price action were the government’s weekly inventory report and comments from major producers regarding adherence to the OPEC+ production cuts and future demand. The Fed said that the economic recovery would be rocky, but that prediction has been priced into the market for several months.US Energy Information Administration Weekly Inventories Report
U.S. crude oil stockpiles fell last week even as net imports jumped sharply, while fuel demand dipped as well, the EIA said on Wednesday.
Crude inventories fell by 1.6 million barrels in the week to August 14 to 512.5 million barrels, less than analysts’ expectations in a Reuters poll for a 2.7 million-barrel drop.
Net U.S. crude imports rose by 1.1 million barrels per day to 3.6 million bpd, the EIA said.
Fuel demand dropped by more than 2 million bpd to 17.2 million bpd in terms of product supplied. Overall fuel demand is down 14% from the year-ago period over the last four weeks.