Key Currency Exchange Rates for Friday, 6/23/23

Futures slid as much as 1.2 percent in New York after losing 2 percent Tuesday, the first drop in seven sessions. Inventories rose by 1.78 million barrels last week, the American Petroleum Institute was said to report. A Bloomberg survey showed nationwide stockpiles fell for a fifth week. OPEC output climbed in July as Libya boosted supply, according to a Bloomberg survey of analysts, oil companies and ship-tracking data. “Prices are under pressure as the recent gains are seen as unsustainable,” said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. “The API is contributing to the overall situation, and should the DOE data confirm the trend, it’s likely to weigh on prices,” he said, referring to the U.S. Department of Energy figures due for release on Wednesday. Click Read More below for additional details.

Futures were little changed in New York, down 3.2 percent for the week. U.S. production had the biggest weekly advance since June, according to Energy Information Administration data on Wednesday, offsetting the largest decline in stockpiles in almost a year. Oil processing in China fell in July, the biggest decline for that particular month in three years, figures from the National Bureau of Statistics showed Monday. “Prices were unimpressed by the reported significant drop in oil inventories,” said Norbert Ruecker, head of commodities research at Julius Baer Group Ltd. in Zurich. “Instead, the market’s focus was possibly on robust U.S. output growth or the fact that the driving season and seasonal demand strength are set to ebb over the coming weeks.” U.S. crude output rose by 79,000 barrels a day to 9.5 million a day last week, the highest since July 2015, the Energy Information Administration reported Wednesday. Stockpiles declined for a seventh week to 466.5 million barrels. Click Read More below for additional detail.

The market “looks a lot more bullish than it did three or four months ago,” said James Williams, president of London, Arkansas-based energy researcher WTRG Economics. The stockpile declines aren’t surprising since “refinery utilization is coming down this time of year because it’s turnaround season,” he said. Nonetheless, he predicted prices will rally again Wednesday if the government confirms the drops. The Organization of Petroleum Exporting Countries is expected to extend supply cuts beyond their March expiration date, which has supported oil above the key $50-a-barrel psychological threshold. In addition, oil demand is proving more resilient than some expected, Saudi Arabia’s Minister of Energy and Industry Khalid Al-Falih said in Riyadh. Stockpiles at Cushing, Oklahoma, the delivery point for New York-traded futures contracts, probably declined by 500,000 barrels, according to a separate forecast compiled by Bloomberg. A Bloomberg survey estimated that U.S crude stockpiles slid by 3 million barrels last week, while gasoline stockpiles probably rose by 1.7 million barrels. The API report also showed crude stockpiles rose by 519,000 barrels, while Cushing supplies fell by 55,000 barrels last week. A draw at Cushing would be the first since August if the Energy Information Administration confirms it in its data release on Wednesday. Click Read More below for additional information.