Oil down 1% as rate hike worries override U.S. summer demand for fuels
Investing.com — Another week of U.S. crude and fuel draws and another drop in oil prices instead, with the market being fixated with rate hike worries rather than healthy summer demand for energy.
Crude inventories fell for a third week in a row in the United States while stockpiles of gasoline and distillates shrank too, the Energy Information Administration, or EIA, said in its Weekly Petroleum Status Report.
New York-based WTI, or West Texas Intermediate, was down 70 cents, or 1%, to $71.09 per barrel by 12:35 ET (16:35 GMT). The U.S. crude benchmark hit a session bottom of $70.23 before being lifted from the lows by the EIA’s positive report on supply-demand.
London-based Brent showed a drop of 81 cents, or 1.1%, to $75.84. The global crude benchmark earlier sank to $75.05.
“To be fair, the EIA issued a report in line with the healthy summer demand for travel and energy but all that was sidelined by concerns that the Fed will likely hike rates again when it meets in three weeks,” said John Kilduff, partner at New York energy hedge fund Again Capital.
The U.S. crude inventory balance fell by 1.508 million barrels during the week ended June 30, the EIA said in its Weekly Petroleum Status Report.
In the prior week to June 23, the EIA reported a drawdown of 9.603M barrels, which was the largest of its kind in three months.
The latest crude pull from storage was still higher than the 0.983M forecast on the average by industry analysts tracked by Investing.com.
The crude draw reported by the EIA also came with a usual caveat: The release of 1.5M barrels from the U.S. Strategic Petroleum Reserve, that if added to the headline draw would translate to a total crude inventory decline of around 3M barrels.
On the gasoline
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