- Crude oil inventories decreased by 446,000 barrels.
- The inflationary effect causes demand to be lower.
- Another influential factor is the gas supply cut in Europe.
Oil prices have fallen on Wednesday, following data from the U.S. government showing a decrease in gasoline demand during this summer period in North America. The effect of inflation is being felt in fuel consumption.
Gasoline inventories rose to 3.5 million barrels the previous week. Gasoline product supplied (a proxy for demand) was 8.5 million barrels per day, which was down 7.6% on a year-over-year basis
“Gasoline is the big concern here. You really don’t want to back off on gasoline in the middle of summer,” said Robert Yawger, executive director of energy futures at Mizuho.
Crude inventories have fallen by 446,000 barrels last week, according to data reported by the EIA (Energy Information Administration). Oil prices are experiencing volatility amid concerns about gas supplies in Europe and worries that the economy will slip into recession as it struggles with inflation.
“With little room for OPEC+ to increase production, the oil market will struggle to balance in the coming months, which will boost prices,” said Stephen Brennock of oil broker PVM.
Supply constraints kept Brent crude oil above $105 per barrel and generated a large pullback in Brent month-on-month spreads to $4.50 per barrel. In this context, prices in the previous month are higher than those in future months.
