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Gloomy Economic News And Iran Threat Driving Crude Prices

Gloomy economic news and ample supply continue to put downward pressure on US oil prices. However, Tehran�s threat to shut the Strait of Hormuz in retaliation against tightening sanctions provided a support for oil markets last week. The Eurozone conundrum is giving rise to concern that its economic mess is pulling the global economy down, while US economic indicators do not themselves look promising. It remains to be seen if recent lower crude prices will provide any stimulation for developed economies.

In its Weekly Petroleum Status Report , released on 5 July, the US Energy Information Administration (EIA) said US commercial crude oil inventories decreased by 4.3mn barrels during the week ending 29 June. At 382.9mn barrels, US crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 0.2mn barrels and are below the lower limit of the average range. Distillate fuel inventories decreased by 1.1mn barrels last week and are below the lower limit of the average range for this time of year. Total commercial petroleum inventories decreased by 4.1mn barrels.

US crude oil imports averaged 8.8mn b/d, down by 344,000 b/d from the previous week. Over the last four weeks, crude oil imports have averaged 9.1mn b/d, 16,000 b/d below the same four-week period last year. US crude oil refinery inputs averaged 15.6mn b/d during the week, 14,000 b/d below the previous week�s average. Total products supplied over the last four-week period have averaged 19.2mn b/d, up by 0.9% compared to the similar period last year.

Settlement Prices For Benchmark Crudes ($/B)

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