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Crude oil prices moved little today after the U.S. Energy Information Administration reported a crude oil inventory build of 2 million barrels for the week to June 10.
This compared with a build of 2 million barrels for the previous week. In fuels, the EIA estimated a mixed picture.
Gasoline inventories, according to the EIA, shed 700,000 barrels last week, which compared with a decline of 800,000 barrels for the previous week.
Gasoline production averaged 10 million barrels daily in the week to June 10, which was largely unchanged on a week earlier.
In middle distillates, the EIA estimated an inventory increase of 700,000 barrels for the week to June 10, with production averaging 4.9 million bpd.
This compared with an inventory build of 2.6 million barrels for the previous week and production of 5 million bpd.
Retail fuel prices, meanwhile, remain at record highs, with the national average per gallon of regular gasoline topping $5 for the first time ever earlier this month. Refineries are running at higher than usual capacity rates, with last week’s at 93.7 percent, compared with 94.2 percent a week earlier.
Fears are rising now that a bad hurricane season could have devastating consequences for fuel prices. Yet even a mild hurricane season could lead to refinery closures along the Gulf, to reduce the risk of damage, and this, too, would affect fuel prices.
This would be unfortunate as refineries appear to still be struggling with the lingering effects of the pandemic. What this means is that it is difficult for the processing plants to ramp up production as quickly as demand is rising, contributing to the fundamentals imbalance that is pushing prices higher.
According to Wood Mackenzie analysts, the fuel market will remain tight for another couple of years, meaning prices will also remain high although more sharp increases are less likely.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.