The price of oil fell by about 0.4% after falling by more than 1% yesterday. Concerns about demand in China are putting pressure on prices. Data on petroleum product inventories in the United States also came into focus.
The latest Chinese data pointed to ongoing economic problems and followed earlier signals that suggest a decline in oil demand from some of the country's refineries. The National Bureau of Statistics (NBS) said today that consumer prices rose again in June (for the 5th month in a row), but the growth rate unexpectedly slowed, while producer price deflation persisted. Overall, the latest data strengthened the case for monetary policy easing.
Meanwhile, the American Petroleum Institute reported that crude oil inventories fell by 1.9 million barrels for the week ending July 5. Analysts had expected a 250,000-barrel draw. For the week prior, the API reported a surprise 9.163-million-barrel draw in crude inventories. Gasoline inventories fell by 3 million barrels, after last week’s 2.468-million-barrel increase. Cushing inventories were down 1.2 million barrels this week, according to API data, after rising by 404,000 barrels in the previous week. Later today (at 14:30 GMT), an official report from the Energy Information Administration will be presented, while experts expect that oil reserves fell by only 0.25 million barrels last week.
On Tuesday, the Energy Information Administration (EIA) raised its 2024 demand estimate to 1.11 million barrels per day—up from 1.08 million bpd—while also raising the 2025 estimate from 1.53 mbpd to 1.77 mbpd, noting that the global oil market is heading for a supply deficit next year.
Traders will scour a monthly report from the OPEC later Wednesday for more on the global market outlook. The International Energy Agency will release its corresponding view a day later.