Oil Steady Near Five-Month High With U.S. Stockpiles Shrinking

 Oil Steady Near Five-Month High With U.S. Stockpiles Shrinking
imageCommoditiesAug 05, 2020 08:54PM ET

(C) Reuters. Oil Steady Near Five-Month High With U.S. Stockpiles Shrinking

(Bloomberg) — Oil was steady in New York near a five-month high as U.S. crude stockpiles fell more than expected, offsetting rising fuel inventories and softer demand.

Crude stockpiles slid to the lowest level since April, falling more than double the median estimate in a Bloomberg survey. However, government data also showed gasoline and distillate inventories rose by a combined 2 million barrels last week as the summer driving season nears its end, while demand for motor fuel stagnated, highlighting the uneven recovery from a virus-driven crash.

While oil is starting to rally, OPEC+ and some U.S. producers are set to test the market by returning supply after prices recovered from a plunge below zero in April. Rising coronavirus infections had anchored crude near $40 a barrel since early June, and while many major economies are struggling to control the outbreak, progress on a possible vaccine is only inching forward.

U.S. crude stockpiles fell by 7.37 million barrels for a second weekly decline through July 31, the Energy Information Administration reported Wednesday. The median estimate in a Bloomberg survey had forecast a decrease of 3.35 million. However, inventories at the storage hub of Cushing, Oklahoma, rose for a fifth week to the highest level since May.

The 3-2-1 refining margin for combined gasoline and diesel against WTI — a rough profit gauge for processing a barrel of crude — held below $10 a barrel for a third consecutive day on Thursday. The measure is at its lowest seasonal level in nearly a decade as the pandemic keeps Americans off the road during the normally busy summer driving season.

Meanwhile, Saudi Aramco (SE:2222) plans to release pricing for September’s crude shipments on Thursday, after delaying the decision earlier this week, according to people with knowledge of the situation

(C)2020 Bloomberg L.P.

Oil Steady Near Five-Month High With U.S. Stockpiles Shrinking

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