U.S. oil surged $3.1, or 4.6%, at a settlement price of $70.3 per barrel; cloth oil rose $2.88, or 4.2%, to $72.23 per barrel. According to the EIA report, oil inventory of U.S. crude oil unexpectedly increased by 2.170 million barrels in the week ending July 16, the first increase since May. However, refined oil inventories all recorded a decline, with a decrease of 121,000 barrels of gasoline and a decrease of 13490 million barrels of refined oil, which supported oil prices.
According to the EIA report, oil inventory commercial crude oil excluding strategic reserves imported 7.077 million barrels per day last week, an increase of 876,000 barrels per day from the previous week, and the net crude oil imports for the week ended July 16 rose to the highest level since December 2020. U.S. crude oil exports fell by 1.562 million barrels per day last week to 2.463 million barrels per day, and crude oil exports for the week ended July 16 were the lowest since the week of May 7, 2021.
Commercial crude oil inventories excluding strategic reserves increased by 2.107 million barrels to 439.7 million barrels, an increase of 0.5%. Last week, domestic crude oil production in the United States remained unchanged at 11.4 million barrels per day.
Oil prices plummeted 7% on Monday after the OPEC+ alliance of the Organization of Petroleum Exporting Countries and its allies had reached an agreement to increase production by 400,000 barrels per day between August and December. And concerns that increased cases of Delta variant virus infections in major markets such as the United States, the United Kingdom and Japan will affect demand, which has intensified previous selling.
U.S. stock markets continued to rise Wednesday, and better-than-expected performance of listed companies have distracted the market’s attention on the economic impact of the coronavirus pandemic. Matt Sallee, portfolio manager of Tortoise, said that the market was indeed driven by macro factors. After a large sell-off on Monday, the market hoped to rise.
Overall, the OPEC agreement clearly defines what the market should expect in terms of resumption of production, said Andy Lipow, president of Lipow Oil Associates. However, even this is not enough to stop the overall decline of global oil inventories, according to OPEC+ data, which for me is supporting the market and wait more oil inventory data.