Last week’s crude oil weekly report, which was postponed one after another, was released together with this week’s data yesterday. Data released by the U.S. Energy Information Administration (EIA) on Wednesday showed that in the week ended June 17, EIA crude oil inventories fell by 386,000 barrels, refined oil inventories increased by 133,000 barrels, and gasoline inventories increased by 1.489 million barrels. In the week ending June 24, U.S. commercial crude oil inventories decreased by 2.762 million barrels, refined oil inventories increased by 2.559 million barrels, and gasoline inventories increased by 2.645 million barrels. The refinery’s crude oil processing capacity increased by 403,000 barrels per day, and the refinery’s capacity utilization rate increased by 1 percentage point to 95%.
WTI crude oil and Brent crude oil fell from their intraday highs after the EIA crude oil inventory report was released.
Yang An, head of energy and chemical research and development at Haitong Futures, said in an interview with a reporter from Futures Daily that the inventory data released last week due to system reasons had little change, and the data for the week of June 17 had little impact on the market. The highlight was this week’s inventory data, in which refinery capacity utilization was recorded at 95%, the highest utilization rate since September 2019. In order to ease the pressure on the refined oil market, U.S. refineries have increased their refining capacity, so crude oil inventories continue to decline, while refined oil inventories continue to accumulate. In addition, domestic crude oil production in the United States increased by 100,000 barrels last week to 12.1 million barrels per day. At the same time, the United States continued to increase investment in strategic oil reserves. Strategic oil inventories fell by 6.95 million barrels, the lowest since the week of April 18, 1986.
“Overall, although crude oil inventories have declined, the supply of crude oil resources in the United States has increased, refineries have increased processing capacity, and refined oil inventories have accumulated significantly, which has alleviated market anxiety.” Yang An said.
Zheng Mengqi, an energy and chemical researcher at Hizheng Futures, analyzed that judging from the EIA data for the two weeks of June 17 and June 24, crude oil inventories fell for both weeks, and the decline was larger in the last week, falling by 2.762 million barrels. Refinery capacity The utilization rate also increased in both weeks, rising to 95%, which means that the demand for refinery processing is strong. However, it is worth noting that gasoline and distillate inventories have increased for two weeks. In the past week, gasoline and distillate inventories have increased significantly by 2.645 million barrels and 2.559 million barrels respectively. The high levels of external gasoline, diesel and fuel cracking continue to fall, and terminal refined oil supplies The contradiction is gradually easing. In the future, attention should be paid to whether the crackdown of the external disk continues.
It is understood that after the Fed raised interest rates by 75 basis points in the early period, the supply of crude oil dropped, and inventories of crude oil and refined oil products were at low levels. Crude oil prices have continued to rise recently.
Zheng Mengqi told reporters that the United States and Europe may implement price ceiling measures for Russian oil and natural gas. This measure can not only maintain the supply of Russian crude oil, thereby curbing the current sharp rise in oil prices, but also limit Russian energy revenue. While expectations of supply cuts in Russia have weakened, concerns about supply declines from other crude oil producers are intensifying. “Among them, the Libyan National Oil Company declared force majeure in the Gulf of Sirte, which includes the Es Sider, Ras Lanuf, Brega and Zueitina export terminals, thus affecting Libyan oil exports. In addition, Ecuador suffered damage to public facilities, occupation of oil wells, Oil production came to a halt as the road closure hampered oil transportation and the supply of diesel oil necessary for drilling activities. Before the protests, Ecuador’s crude oil output was about 520,000 barrels per day. During the 15 days of protests, Ecuador’s total oil production fell by 1.8 million barrels. bucket.”
Judging from this week’s OPEC+ meeting, the meeting will discuss the increase in crude oil production in August. The UAE has previously stated that its current oil production is close to the OPEC+ reference production limit of 3.168 million barrels per day, and its commitment to this limit will continue until the end of the agreement.
In Zheng Mengqi’s view, judging from the UAE’s statement, OPEC+ will maintain a moderate increase in production in August and continue to increase production by 648,000 barrels per day. This rate cannot change the current tight supply and demand pattern. In mid-July, Biden will visit Saudi Arabia. Under Biden’s initiative to sue for peace, Saudi Arabia may release some of its idle production capacity to cooperate with Biden’s desire to lower gasoline prices. Related output adjustments still need to be further tracked. In the current situation where foreign gasoline and diesel cracking is at a relatively high level, refinery capacity is insufficient, and demand is peak season, the monthly difference in crude oil remains strong, indicating that the supply and demand side is still tight.
“In general, crude oil inventories are currently at low levels, and the support below oil prices is strong. However, the Fed continues to raise interest rates by 75 basis points in July, the United States pressures OPEC to increase production, and the supply recovery in Libya and Ecuador cannot be ignored. The Russia-Ukraine conflict cannot be ignored. It is not over yet. Discussions on sanctions against Russia in Europe and the United States are volatile and uncertain, and oil prices will fluctuate at high levels in the near future.” Zheng Mengqi said.
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