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Oil futures traded lower on Wednesday, but pared some of their early losses despite the U.S. government reporting that domestic crude supplies edged higher in the latest week, while oil stockpiles at the nation’s storage hub and inventories of gasoline and distillates declined.
A monthly report from the Organization of the Petroleum Exporting Countries, meanwhile, forecast that global oil demand will decline in the second half of the year, but at a much slower pace than the first half, which was marked by lockdowns of businesses to limit the spread of COVID-19.
“Any hopes around oil prices pushing higher in the short term have been squashed by global growth concerns, rising U.S. stockpiles and coronavirus related developments,” said Lukman Otunuga, senior research analyst at FXTM.
“Given how the technical picture mirrors the fundamentals, the path of least resistance for oil points south, with $40 acting as a potential ceiling for WTI Crude if nothing changes on the macro front,” he told MarketWatch.
Against the backdrop, West Texas Intermediate crude for July delivery CL.1, -1.58% CLN20, -1.58%, the U.S. benchmark, was down 23 cents, or 0.5%, at $38.15 a barrel on the New York Mercantile Exchange. It was trading at $37.52 before the supply data.
Global benchmark Brent oil for August delivery BRNQ20, -0.97% lost 27 cents, or 0.7%, at $40.69 a barrel on ICE Futures Europe following a 3.1% rise in the previous session.
The Energy Information Administration reported Wednesday that U.S. crude inventories rose by 1.2 million barrels for the week ended June 12. That compared with a forecast by analysts polled by S&P Global Platts for an average decline of 3.5 million barrels. The American Petroleum Institute on Tuesday, however, reported a rise of nearly 3.9 million barrels.
The EIA data also showed crude stocks at the Cushing, Okla., storage hub fell by about 2.6 million barrels for the week, but weekly stocks in the Strategic Petroleum Reserve climbed by 1.7 million barrels.
Gasoline supply fell by 1.7 million barrels, while distillate stockpiles were 1.4 million barrels lower last week. The S&P Global Platts survey had shown expectations for a supply decline of 2.2 million barrels for gasoline and an increase of 3.1 million barrels for distillate inventories.
On Nymex, July gasoline RBN20, +0.15% climbed 0.5% to $1.2126 a gallon and July heating HON20, -0.24% rose 0.2% to $1.1848 a gallon.
July natural gas NGN20, +0.74% traded at $1.625 per million British thermal units, up 0.7%, after a loss of more than 3% Tuesday.
Oil prices gained on Tuesday after the International Energy Agency said that, while the world’s demand for crude will drop by 8.1 million barrels a day in 2020, “the largest in history,” demand in 2021 will bounce back by 5.7 million barrels a day, the “largest one-year jump ever recorded.”
The OPEC monthly report released Wednesday forecast that global oil demand will fall by 6.4 million barrels per day in the second half of this year. That’s at a much slower rate than the decline of 11.9 million barrels per day seen in the first half.
On Thursday, an OPEC-led meeting of the Joint Ministerial Monitoring Committee, or JMMC, will hold a meeting via video conference to review compliance with the recent global production cuts.
