Tight US Oil market prevents further price slide – Commerzbank

This week's inventory report from the US Energy Information Administration is likely to have played a major role in preventing Oil prices from slipping noticeably below the level seen before the escalation of the Middle East conflict, Commerzbank's commodity analyst Barbara Lambrecht notes.

U.S. crude stocks fall sharply

"This is because it shows a rather tight US market: US crude Oil inventories fell by 5.8 million barrels in the reporting week ending 20 June compared to the previous week, which was significantly more than expected. US commercial crude inventories are now almost 11% lower than the 5-year average at this point."

"Refinery processing was significantly higher than usual at just under 17 million barrels per day. However, this could not prevent gasoline inventories from surprisingly falling by a good 2 million barrels compared to the previous week (instead of rising slightly as expected). The main reason for this was a significant increase in US gasoline demand to 9.7 million barrels per day."

"However, it must be said that these time series are very volatile. In principle, gasoline stocks (with a 3% shortfall compared to the usual levels) are not as tight as crude Oil stocks in the US."