Influenced by last week’s sharp decline in U.S. oil inventories, international oil prices rose significantly in the morning of the 26th, declined in the afternoon and rose significantly at the end of the day.
On the same day, the price of light crude oil futures for August delivery on the New York Mercantile Exchange rose to $59.93 a barrel after the release of U.S. crude oil inventory data, while London Brent crude oil futures for August delivery hit a mid-day high of $66.85 a barrel.
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U.S. commercial oil stocks fell by 12.8 million barrels last week, 5% higher than the average level in the past five years, according to data released by the U.S. Energy Information Agency on the 26th. The decline was much higher than the 3.1 million barrels decline in the previous week, the largest decline since September 2016.
Over the same period, vehicle gasoline stocks fell by 1 million barrels annually, distilled oil stocks by 2.4 million barrels annually, and propane and propylene stocks increased by 1.4 million barrels annually. Commercial oil stocks, including commercial crude oil, refined oil, propane and propylene, fell by 11.9 million barrels last week.
Data show that the average daily import of crude oil in the United States last week was 6.7 million barrels, a decrease of 812,000 barrels compared with the previous week. The average daily crude oil processing capacity of refineries was 17.3 million barrels, an increase of 73,000 barrels compared with the previous week. The refinery operation rate was 94.2%, higher than 93.9% in the previous week.
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In addition, the average daily output of U.S. crude oil last week was 12.1 million barrels, an increase of 100,000 barrels annually, while the average daily export volume of crude oil increased to 3.77 million barrels.
According to data released late on the 25th by the American Petroleum Association, commercial crude oil fell by 7.55 million barrels last week, gasoline stocks fell by 3.17 million barrels, while distilled oil stocks increased by 160,000 barrels annually.
Phil Flynn, senior market analyst at PRICE Futures Group in the United States, said on the 26th that it seemed that the rise in U.S. oil inventories in the past few weeks had ended and that it was time for returns. The decline in crude oil inventories may be a sign of over-confidence in supply, with oil prices rebounding sharply as demand exceeded expectations in the United States and China.
According to a report released by JBC Energy Austria on the 26th, the rise in international crude oil prices on the 26th is likely due to a sharp drop of 7.5 million barrels in U.S. commercial crude oil inventories last week, according to inventory data released by the American Petroleum Association.
John Kilduff, partner of Again Capital Management, said the oil inventory report released on the 26th was one of the best reports. Domestic production was declining, demand for gasoline was strong, exports fell sharply, and refinery start-up rate increased, all of which constituted a positive factor.
In addition, PES, the largest and oldest refinery on the east coast of the United States with a daily processing capacity of 330,000 barrels, could be permanently closed, which would have an impact on the U.S. gasoline supply.
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Andy Lipow, president of Lipow Petroleum Co., said that all the unused products of the United States will be exported. With the increase of domestic production, the oil products available for export will increase, and world oil demand will continue to grow. The United States will not only meet new demand, but also fill the gap created by the decline in exports of Iran and Venezuela. As PES refineries shut down, oil prices in Philadelphia and New York will rise significantly in the coming weeks until new supplies emerge, he said, and the price of a gallon of oil will rise by $0.1.
By the end of the day, light crude oil futures for August delivery on the New York Mercantile Exchange had risen $1.55 to $59.38 a barrel, or 2.68 per cent. On the same day, London Brent crude oil futures for August delivery rose $1.44 to $66.49 a barrel, an increase of 2.21%.