Crude Oil Prices Fall for Second Week in a Row
June 12, 2023
Crude oil prices fell again on Friday and for the second week in a row mainly driven by low CCI and PPI index data from China lowering fuel demand forecast.
The Baker Hughes Rig Count Report had crude oil rigs up 1 to a total of 556.
A Chevron executive said concerns about the global economy dampened the oil market’s reaction to Saudi Arabia’s pledge to cut supplies and has capped price this year. Colin Parfitt, Chevron’s vice president of midstream, said “Saudi Arabia made a cut of 1 million barrels per day and fundamentally, the market yawed. It’s all about macroeconomic sentiment.” He said softer prices are masking an oil market that is little changed from last year and remains tight, with little spare capacity to deal with a future increase in demand. He added that an uptick in economic activity from China, and with if fuel demand, could quickly change sentiment in the market.
US crude oil inventories decreased 500,000 barrels week over week and now are 2% below the five-year average. Total gasoline inventories increased by 2.7 million barrels week over week and are 8% below the five-year average. Distillate inventories increased by 5.1 million barrels week over week and are 16% below the five-year average. Propane inventories increased 1.7 million barrels week over week and are 30% above the five-year average.
Apache Corp said it was suspending drilling in the North Sea and reducing its British workforce because high taxes made the operation less competitive.