Title: Oil prices extend losses as demand concerns outweigh tight supply
Jul 21, 2022 01:00AM ET
Oil prices fell for a second straight session Thursday as demand concerns outweighed tight global supplies after U.S. government data showed tepid gasoline demand during the peak summer driving season.
By 12:27 AM ET, Brent crude futures were down 77 cents, or 0.7%, at $106.15 a barrel, after falling 0.4% in the previous session. U.S. West Texas Intermediate crude futures fell 88 cents, or 0.9%, to $99.00 a barrel after dropping 1.9% on Wednesday.
Oil prices were choppy as traders had to balance tightening global supplies due to the loss of Russian barrels following the country's invasion of Ukraine with recession fears that could weaken energy demand.
Gasoline inventories in the U.S. rose by 3.5 million barrels last week, government data showed Wednesday, far exceeding analysts' forecasts for a 71,000-barrel increase, according to a Reuters poll.
The data showed product supply of gasoline-an indicator of demand-was about 8.5 million barrels a day, or about 7.6%, lower than at the same time a year ago.
"We are at the height of the peak driving season, and gasoline demand is lagging," said Stephen Schork, director of The Schork Report.
Warren Patterson, head of commodity research at ING, said the U.S. inventory data was relatively bearish, as gasoline inventories rose despite lower refinery utilization this week.
"It appears that higher prices are having some impact on demand as gasoline demand was again seasonally low this week," he added.
Concerns over Libyan supply have also eased as the National Oil Corp (NOC) said Wednesday that crude production had resumed at several oil fields after a force majeure on oil exports was lifted last week.
However, one of Canada's main oil export pipelines, the Keystone pipeline, was operating at reduced capacity for a third day Wednesday, operator TC Energy said in a statement, as repairs continued at an outside power facility in South Dakota.