Futures on US West Texas Intermediate Crude Oil extended losses from the previous trading day and hit lows unseen in a month on Thursday due to concerns over weakening gasoline demand in the United States, even as crude oil stocks registered a sharp drop.
A report by the US Energy Information Administration (EIA) showed on Wednesday that crude oil inventories had decreased by 9.362 million barrels during the week ended August 28th, or a sixth consecutive period of decline. In comparison, analysts on average had expected a 1.887 million decrease in inventories last week.
However, the EIA report also showed that demand for gasoline had decreased to 8.78 million barrels per day during the past week from 9.16 million barrels per day in the prior period.
According to a recent ANZ Research note, WTI Crude futures have been under pressure “after U.S. refiners earmarked a long list of maintenance closures over the coming months that will no doubt impact demand for crude oil.”
“This is compounded by weak refining margins, which are their lowest in nearly a decade for this time of the year,” the note stated.
Utilization rates at US refineries dropped 5.3% to 76.7% of total capacity because of output shutdowns prior to Hurricane Laura.
According to AxiCorp market strategist Stephen Innes, this suggests a “seasonal drop off in refinery runs and higher oil inventory levels as we advance through September.”
As of 9:00 GMT on Thursday WTI Crude Oil Futures were retreating 1.59% to trade at $40.85 per barrel, after earlier touching an intraday low at $40.78, or a price level not seen since August 4th ($40.14). WTI Crude Futures rose 5.81% in August, while marking their fourth straight month of gains.
Brent Oil Futures were retreating 1.73% on the day to trade at $43.62 per barrel, after earlier touching an intraday low at $43.56, or a price level not seen since August 4th ($43.26). Brent Oil Futures rose 4.45% in August, while marking their fifth straight month of gains.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $41.98
R1 – $42.74
R2 – $43.96
R3 – $44.72
R4 – $45.47
S1 – $40.76
S2 – $40.00
S3 – $38.78
S4 – $37.55
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $44.88
R1 – $45.53
R2 – $46.68
R3 – $47.33
R4 – $47.99
S1 – $43.73
S2 – $43.08
S3 – $41.93
S4 – $40.79