Oil futures end higher Wednesday after official data showed a fall in U.S. crude and gasoline inventories ahead of the start of the summer driving season over Memorial Day weekend.
West Texas Intermediate crude for July delivery
rose 56 cents, or 0.5%, to close at $110.33 a barrel on the New York Mercantile Exchange.
July Brent crude
the global benchmark, settled at $114.03 a barrel on ICE Futures Europe, up 47 cents, or 0.4%.
Back on Nymex, June gasoline
rose 0.5% to close at $3.832 a gallon, while June heating oil
jumped 2.2% to $3.866 a gallon.
June natural-gas futures
rose finished with a gain of 2% at $8.971 per million British thermal units.
The Energy Information Administration said U.S. crude inventories fell 1 million barrels last week, as refiners ramped up activity in response to an expected rise in seasonal gasoline demand, while gasoline stocks dropped 500,000 barrels and distillate stocks rose 1.7 million barrels.
“Refining activity is finally responding to strong refining margins, low product inventories and an impending ramp-up in demand as we formally enter summer driving season this weekend,” said Matt Smith, lead oil analyst, Americas, at Kpler, in emailed comments.
Analysts surveyed by S&P Global Commodity Insights had looked for crude to show a rise of 100,000 barrels, while gasoline supplies were seen down 500,000 barrels and distillates up 600,000 barrels.
The American Petroleum Institute late Tuesday said U.S. crude inventories rose 567,000 barrels last week, according to market sources. Gasoline supplies fell 4.2 million barrels, while supplies of distillates were down 949,000 barrels.
“The tightening in the U.S. gasoline market will raise concerns over supply as we move into driving season. Tightness in the U.S. is pulling in gasoline from elsewhere, including Europe, which is also looking increasingly tight,” said Warren Patterson, head of commodities strategy at ING, in a note.
U.S. Energy Secretary Jennifer Granholm on Tuesday, speaking to reporters in Louisiana, was asked if the Biden administration was weighing restrictions on petroleum exports to put a lid on gasoline and diesel prices. “I can confirm the president is not taking any tools off the table,” Granholm said, according to Reuters.
“Up until now the U.S. administration has been reluctant to go down this route and instead has focused on releases from the Strategic Petroleum Reserve,” Patterson said. While releasing reserves ”may offer some relief to crude oil prices, they may do little to ease gasoline shortages if the bottleneck is on the refining side,” he said.
The European Union continues to negotiate toward a ban on imports of Russian oil and other sources of energy, with a meeting of EU leaders at the end of the month looking less likely to produce a final agreement, Patterson said.