Dwindling stockpiles push oil prices up, eyes on OPEC+ meeting
Oil prices on the fuel exchange in New York are rising in response to dwindling stockpiles of this commodity, as the latest report from the Department of Energy (DoE) indicates. According to brokers, OPEC+ will soon decide the future of oil supplies to the global markets.
Oil gets pricier in the markets. A barrel of West Texas Intermediate for June delivery is trading at 79.06 USD on NYMEX in New York, showing an increase of 0.55%. Brent for July delivery on ICE is trading at 83.18 USD per barrel, marking a rise of 0.52%.
U.S. crude oil stockpiles last week dropped by 2.51 million barrels, or 0.55%, to 457.02 million barrels - as per the latest U.S. Department of Energy (DoE) report.
U.S. oil inventories decline
This marks the second consecutive week of declines in U.S. oil stockpiles, the first occurrence of such a pattern since March. Oil inventories in the United States are at their lowest since mid-April.
Gasoline stockpiles last week decreased by 235,000 barrels, or 0.1%, to 227.77 million barrels, the DoE report notes.
According to the DoE, distillate fuel stockpiles, which include heating oil, dropped by 45,000 barrels, or 0.04%, to 116.37 million barrels.
Optimism among oil investors
Analysts believe these developments give "oil bulls" reason for optimism, as oil prices are likely to go up.
In the U.S., refineries are heating up as they increase fuel production in anticipation of the summer travel season, which will begin unofficially on Memorial Day on May 27. This year, many Americans are expected to hit the road for their vacations.
In the Midwestern U.S., refineries are currently processing 3.8 million barrels of oil per day, the highest seasonal rate observed since 2018.
Critical OPEC+ meeting
Meanwhile, OPEC+'s crucial meeting for the fuel markets looms on the horizon. At the meeting scheduled for June 1, ministers from the alliance will decide on the future of oil supplies to the global markets.
For now, it's widely anticipated that the 22 countries of the OPEC+ alliance will prolong the current restrictions on oil supplies for the second half of 2024 at the start of June.
