The crude oil inventory decline would have been larger if not for another big release of barrels from U.S. Strategic Petroleum Reserve (SPR).
“Refiners will continue to run hard in Q3,” Tudor, Pickering, Holt refining analyst Matthew Blair said in a note this week, adding he would not be surprised “if Q3 runs weren't higher” than June given past conservative forecasts.
“The refined output was put back on that ship and it set sail without a destination. In the mid-seas it received the destination so it reached at its course, went to New York,” India Deputy Governor Michael Patra said at an event to celebrate 75 years of India’s independence.
“There’s nothing good in this report for anybody unless you’re waiting for things to fall apart and to be a buyer on the downside,” Bob Yawger, director of energy futures at Mizuho, said of the EIA report.
“The demand destruction is only still two weeks but sufficient to say it’s there. That's the big takeaway,” analyst John Kilduff, said after U.S. gasoline inventories posted a larger-than-expected build on weakened demand.
West African imports spiked in May with 5.2 million barrels being discharged in the U.S., more than doubling from April. Light oil, like that from West Africa, typically produces a greater percentage of gasoline than heavy oil.
“Today’s inventory stats and overall builds in crude and products are indicative of investor worries on the overall economy,” said Tony Headrick, energy markets analyst at CHS Hedging, following the EIA report.
“We know refiners are going to have to continue to run at a high rate to keep up with demand. And so the expectation is that the crude supplies are not going to build as dramatically next week,” said Phil Flynn, analyst at Price Futures Group.
High fuel prices have been “a substantial burden on American households,” U.S. Treasury Secretary Janet Yellen said. A fuel tax holiday that temporarily eliminates such taxes, “while not perfect, it is something that should be under consideration.”
Enterprise Products Partners completed early steps toward a proposed $5 billion ethane project east of Houston described by analysts as a “world-scale petchem facility.”