Oil futures edged lower Thursday, pulling back from the highest closes for both Brent and West Texas Intermediate crude in more than two years, though downside was expected to remain limited by optimism over demand prospects heading into summer.
West Texas Intermediate crude for July delivery
the global benchmark, was off 16 cents, or 0.2%, at $71.19 a barrel on ICE Futures Europe. WTI on Wednesday saw the highest close for a front-month contract since Oct. 22, 2018, while Brent saw its highest finish since May 21, 2019, according to Dow Jones Market Data.
“The demand outlook is strengthening significantly, boosted by the U.S., China and Europe,” said Sophie Griffiths, market analyst at Oanda, in a note. “The broad expectation is that oil demand will exceed supply in the second half of the year.”
She noted OPEC+ data that showed oil demand is expected to be 99.8 million barrels per day against a supply of 97.5 million. “This equation supports a firmer price,” she said.
The American Petroleum Institute reported late Wednesday that U.S. crude supplies fell 5.4 million barrels for the week ended May 28, according to sources. The data were released a day later than usual due to Monday’s U.S. Memorial Day holiday. Crude stocks in Cushing, Okla., the delivery hub for Nymex crude futures, edged up by 741,000 barrels for the week, sources said.
The API reportedly showed gasoline stockpiles up by 2.5 million barrels, while distillate inventories rose 1.6 million barrels.
More closely followed inventory data from the Energy Information Administration will be released Thursday. On average, the EIA is expected to show crude inventories down by 3.3 million barrels, according to a survey of analysts conducted by S&P Global Platts. It also forecast supply declines of 1.1 million barrels for gasoline and 1.6 million barrels for distillates.