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Oil Daily | US Crude Inventories Drop 5.205 Million Barrels; Oil Prices Trend Lower on IEA Demand Forecast

AInvestWednesday, Aug 14, 2024 4:00 am ET
2min read
【Global Oil Supply and Demand】

Crude oil inventories in the United States fell by 5.205 million barrels for the week ending August 9, as reported by the American Petroleum Institute (API). Analysts had predicted a smaller 2 million-barrel dip. Year-to-date, crude oil inventories have increased by 400,000 barrels, according to API data.

The Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by another 0.7 million barrels as of August 9, bringing the total to 376.5 million barrels. Gasoline inventories also saw a significant drop of 3.689 million barrels this week, while distillate inventories increased by 612,000 barrels. Cushing inventories saw a draw of 2.277 million barrels.

With the Israel-Hamas conflict continuing and reports of the U.S. preparing to ship $750 million worth of bombs to Saudi Arabia, oil prices trended lower due to a Tuesday IEA report forecasting lower oil demand growth in 2025 than previously predicted. The IEA maintained its 2024 forecast but reduced the 2025 growth outlook by 30,000 bpd.

European benchmark natural gas prices have dropped from their highest level this year as concerns about a potential halt to Russian pipeline supplies via Ukraine have eased. The Dutch TTF Natural Gas Futures, a benchmark for Europe’s gas trading, have fluctuated but dropped below $43.70 per megawatt-hour this week, despite escalating tensions at the Russia-Ukraine border.

【Oil-Producing Countries Dynamics】

Es Sider oil export terminal in eastern Libya experienced disruptions due to a fire along a pipeline from the Sirte basin oilfields. The fire has been extinguished, but crude flows remain reduced. This comes a week after production at Libya’s largest oilfield, Sharara, was halted by protests, leading to a declaration of force majeure by the National Oil Corporation.

The United States is urging its allies that maintain relations with Iran to persuade them not to escalate tensions in the Middle East. This comes amidst concerns about a direct conflict between Israel and Iran following recent Israeli strikes. The situation has increased the geopolitical premium in crude oil prices.

【Latest Oil Policies】

The Biden Administration has more than doubled the volume of solar cell imports allowed to enter the U.S. tariff-free, increasing the quota from 5 gigawatts (GW) to 12.5 GW. This move aims to support solar module producers who rely on imported materials and follows a petition from the U.S. solar industry to modify the existing tariff measures.

【Industry News】

The UK’s energy regulator Ofgem has approved a $4.35 billion funding package to fast-track an electricity superhighway project between Scotland and Yorkshire. The project, part of Ofgem’s Accelerated Strategic Transmission Investment framework, aims to boost grid capacity and is expected to be completed by 2029.

【Company News】

Harold Hamm, founder of Continental Holdings, is rallying Big Oil executives to support former President Donald Trump's reelection bid, emphasizing the importance of this election for the oil industry. The mobilization has resulted in significant financial support for Trump’s campaign and associated Political Action Committees, totaling $20.3 million.

A shareholder in Marathon Oil has filed a lawsuit to stop its acquisition by ConocoPhillips, claiming the agreed price undervalues the company. The lawsuit alleges that Marathon Oil shareholders could lose out on $6 billion in company value and accuses management and Morgan Stanley of misrepresenting the deal.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.