Inventories in the US Gulf Coast region and the Cushing oil storage center have all fallen to their lowest levels in months, and the production capacity rankings of some US refiners have changed.
ICE Brent crude oil futures continued to rise today in early Asian trading, supported by falling US crude oil inventories.
As of 12:00 Beijing time, the October contract for Brent crude oil futures was reported at 81.36 US dollars per barrel, up 52 cents from the settlement price on July 31. When the contract closed on the same day, it was up 2.77 US dollars from the previous trading day.
The September contract for WTI crude oil futures was reported at $78.51 per barrel, up 60 cents from the settlement price on July 31. The day's contract closed up $3.18 from the previous trading day.
The US Energy Information Administration (EIA) reports that EIA crude oil inventories fell 3.4 million barrels last week as exports rose to a three-month high. In the week ending July 26, US EIA crude oil inventories fell to 0.433 billion barrels, down from 0.4365 billion barrels in the previous week. In the past five weeks, inventories have been reduced by 27.6 million barrels, down 6.7 million barrels from the same week in the same period last year. Inventories in the US Gulf Coast region fell most significantly, dropping 4.1 million barrels to 0.2428 billion barrels, the lowest level since the week of February 2. The inventory at the Cushing Oil Storage Center in Oklahoma decreased by 1.1 million barrels during the week to 29.9 million barrels, down 4.6 million barrels from the same week in the same period last year.
Crude oil inventories in the US Strategic Petroleum Reserve (SPR) increased by 0.685 million barrels to 0.3751 billion barrels. SPR inventories are not included in the EIA's overall commercial crude oil inventory data.
According to the EIA's Monthly Oil Supply Report, U.S. crude oil production fell less than 1% in May, and falling production in the Gulf of Mexico and North Dakota overshadowed new records in Texas and New Mexico. The average production in May was 13.18 million barrels per day, down from 13.24 million barrels last month, but up from 12.73 million barrels in the same period in 2023.
The EIA reported this week that in 2023, US refiners increased overall production capacity by 2% to 18.4 million barrels per day by expanding existing plants and increasing the production capacity of secondary installations, but it is still below pre-COVID-19 levels. The three major US refiners (Marathon Petroleum, Valero, and ExxonMobil) have all expanded production capacity. Independent refiner PBF Energy replaced Chevron as the fifth largest refiner in the US by production capacity, while Phillips 66 maintained its fourth position.
The US Federal Reserve kept its high target interest rate unchanged for 23 years on August 1, while saying that if inflation continues to ease, the September interest rate cut “may be under consideration.” The Federal Open Market Committee of the Federal Reserve kept the federal funds target interest rate unchanged at 5.25-5.5%. Since July 2023, the Federal Reserve has kept interest rates unchanged after increasing interest rates by 5.25 percentage points since March 2022. This is the steepest rate hike cycle in nearly 40 years.
Federal Reserve Chairman Jerome Powell said after the meeting that the US is nearing the time to gradually ease restrictions. If future data is to be in line with expectations, cutting interest rates at the September meeting will be a viable option.
(The above content comes from the latest opinion of Argus, an independent international energy and commodity price assessment agency)