Oil futures: Prices fall back from highs on US gasoline stock build concerns

16 Jun 2021

London (Quantum Commodity Intelligence) – August Brent fell just short of trading at $75/barrel on Wednesday after the release of US inventory data Wednesday, but prices pulled back from the fresh highs despite the steep fall in crude stocks.

EIA posted figures that showed US crude oil stocks down 7.4 million barrels on the week to 467 million barrels -- initially causing a sharp spike to $74.95/b, up 1.3% on Tuesday's settle.

However, as traders digested the broader stats showing an unexpected build of 2 million barrels in gasoline stocks, Brent fell back to $74.25/b (1800 GMT) compared to Tuesday’s settle of $73.99/b.

The higher dollar late Wednesday also knocked oil off the highs.

July WTI reached a high of $72.99/b before slumping back to $72.02/b, compared to the previous-day’s settle of $72.12/b.

It's the second straight day the front month Brent crude contract has mounted an attempt to gain a foothold above $75/b and failed as bulls look to march towards analyst forecasts of $80/b.

It came as US refinery utilization rates increased to 91.3%, up 2.6% from a week earlier, keeping refined product stocks topped up and cracks low.

Otherwise, sentiment had been positive throughout the day as a host of top trading bosses gave yet more bullish outlooks at the FT Commodities Global Summit.

“The extremely positive assessments of leading oil traders are also supporting prices. One even anticipates a supercycle that could push the oil price towards the $100 per barrel mark again,” said Commerzbank in a note Wednesday.  

Meanwhile, traders appear to have dismissed the chances of the Iranian nuclear deal ahead of the June 18 elections, with diplomats in Vienna failing to find a breakthrough so far.

Some analysts have said that if a deal is not reached ahead of the election, talks could be delayed until after the new government takes power in August.