AAA Daily Fuel Gauge Report for Friday, 7/29/22

Futures climbed as much as 1.7 percent in New York, paring Wednesday’s 4.1 percent loss. Crude and gasoline inventories both dropped by more than by 5.5 million barrels last week, the American Petroleum Institute was said to report. Government data Thursday is also forecast to show supplies fell. Oil remains in a bear market amid concerns that rising supply from Libya to the U.S. will counter production cuts from the Organization of Petroleum Exporting Countries and its partners including Russia. American crude stockpiles are more than 100 million barrels above the five-year average. Click Read More below for additional detail.

Motor fuel prices fell 0.7 percent in New York, while crude futures slipped from the lowest closing level in five weeks. Valero Energy Corp. and Citgo Petroleum Corp. were said to be preparing to restart their refineries in Corpus Christi after Harvey moved through over the weekend. The storm, which made landfall on Friday, is poised to regain strength before crashing ashore again near the Texas-Louisiana border on Wednesday. “It is a question of the market reassessing the risk to refineries while also concluding we are past the peak season in terms of demand,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “We are seasonally heading towards a lower demand period which means that any signs of things beginning to normalize could have quite a negative impact on prices.” Click Read More below for additional detail.

Futures in New York were little changed after slumping 2.4 percent Monday. Inventories probably dropped by about 3.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday. Libya has stopped loadings from its biggest oil field, while Venezuela’s exports also declined in the first half of August. “Right now, we are seeing a draw on the U.S. inventory stocks,” said Michael Poulsen, an analyst at Global Risk Management Ltd. As “the driving season is coming to an end, the question is if the latest draws in U.S. inventories will continue.” U.S. crude stockpiles have declined by almost 43 million barrels since the end of June, according to the Energy Information Administration. While inventories have eased, oil production has increased to the highest since July 2015. Output from major shale fields is also forecast to climb to a record next month. Click Read More below for additional detail.