Crude oil futures traded higher on Thursday morning after the US EIA (Energy Information Administration) reported a decline in distillate and gasoline inventories for the week ending March 14.
At 9.56 am on Thursday, May Brent oil futures were at $71.22, up by 0.62 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $67.33, up by 0.63 per cent. April crude oil futures were trading at ₹5831 on Multi Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹5822, up by 0.15 per cent, and May futures were trading at ₹5834 against the previous close of ₹5818, up by 0.28 per cent.
According to US EIA, total motor gasoline inventories in the US decreased by 0.5 million barrels for the week ending March 14. Finished gasoline inventories and blending components inventories both decreased last week. Distillate fuel inventories decreased by 2.8 million barrels last week and were about 6 per cent below the five-year average for this time of year.
However, the US commercial crude oil inventories increased by 1.7 million barrels for the week ending March 14. At 437 million barrels, US crude oil inventories were about 5 per cent below the five-year average for this time of year. US EIA’s crude oil inventories data was much below the American Petroleum Institute’s estimates of an increase of 4.59 million barrels.
In their Commodities Feed for Thursday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices edged higher on Wednesday with ICE Brent settling 0.31 per cent higher on the day. The gains were driven by a recovery in equity markets and a relatively supportive inventory report from the EIA.
They said that US gasoline inventories have fallen for three consecutive weeks. They’re now the lowest since early January. Gasoline inventories dropped despite implied demand falling over the week and refinery utilisation increasing marginally. Overall, recent data is supportive for the market, they said.
According to EIA, total products supplied in the US over the last four-week period averaged 20.6 million barrels a day, up by 2.5 per cent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, even with the same period last year. Distillate fuel product supplied averaged 4 million barrels a day over the past four weeks, up by 8.3 per cent from the same period last year. Jet fuel product supplied was up 5.2 per cent compared with the same four-week period last year.
Crude oil prices also got support from the increase in tensions in West Asia. Israel began ground operations in Gaza on Wednesday after ending a two-month-old ceasefire with Hamas. Added to this, the US continued its operations against Houthis in Yemen.
Meanwhile, the US Federal Reserve kept interest rates unchanged on Wednesday. It also increased its inflation forecast and lowered the expectations on the US economic growth.
March aluminium futures were trading at ₹263.50 on MCX during the initial hour of trading on Thursday against the previous close of ₹262.45, up by 0.40 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), April jeera contracts were trading at ₹21540 in the initial hour of trading on Thursday against the previous close of ₹21450, up by 0.42 per cent.
April turmeric (farmer polished) futures were trading at ₹12672 on NCDEX in the initial hour of trading on Thursday against the previous close of ₹12748, down by 0.60 per cent.
