Energy prices fell on Wednesday, June 17 after official weekly U.S. oil inventories fell short of estimates that they would reflect strong demand from drivers and refineries.
The U.S. Energy and Information Administration (EIA) reported crude inventories fell by 2.7 million barrels in the last week, compared to analysts’ expectations of a 1.6-million-barrel decrease. (Source: U.S Energy Information Administration, June 17, 2015.)
In the same report for the week ending June 12, U.S. crude oil refinery inputs averaged 16.3 million barrels per day, down by more than 294,000 barrels per day over the previous week.
The U.S. rotary rig count from Baker Hughes was down by nine rigs to 859 for the week of June 12, 2015. This is 995 rigs, or nearly 56%, lower than last year. It was also the 27th straight week of a decline. (Source: Bakerhughes.com, last accessed June 17, 2015.)
Following the release, the price for West Texas Intermediate (WTI), a benchmark for U.S. oil markets, decreased 1.55% to $59.04 before the report.
There is still a massive inventory overhang in the U.S. It’s beginning to diminish, but that’s a normal seasonal pattern as the summer driving season begins.
“Oil prices still trade more than 40% below their peak of around $106.00 in June of last year.” EIA administrator Adam Sieminski said in a statement. “Production still is expected to decline in the second half of this year,” he concluded.
In addition, investors were keeping an eye on the conclusion of today’s Federal Reserve meeting for clues as to when the U.S. might raise interest rates. As inventories have been piling up rapidly, investors expect oil prices to rise going into the second half of 2015 due to stronger demand and an expected fall in stocks.