Oil Price Forecast – EIA Report on Tap with Primary Focus on Gasoline Inventories

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are inching higher in a lackluster trade on Wednesday, shortly before the release of the government’s weekly inventories report. Helping to prop up the market are worrying about tight supplies ahead of the start of the U.S. summer driving season.

At 13:28 GMT, July WTI crude oil is at $110.38, up $0.61 or +0.56%. July Brent crude oil is at $114.17, up $0.61 or +0.54%. The United States Oil Fund ETF (USO) opened at $82.45, up $0.45 or +0.55%.

API Report Shows Large Gasoline Draw

The American Petroleum Institute (API) reported late Tuesday a surprise build in U.S. crude inventories last week. However, gasoline stocks fell, heightening concerns about higher pump prices with just days to go until the start of the U.S. driving season when Americans typically hit the road for vacations.

The API said U.S. crude inventories rose by 567,000 barrels for the week ended May 20. That compared with a draw of 2.4 million barrels reported for the previous week. Analysts were predicting a decrease of about 690,000 barrels.

The API report also showed that gasoline inventories fell by 4.2 million barrels last week, while distillate stocks declined by about 949,000.

EIA Inventories Report on Tap

Inventories data from the U.S. government is due on Wednesday at 14:30 GMT. Analysts polled by Reuters are expecting U.S. crude oil and gasoline inventories to have fallen last week. The draw down in crude inventories is expected to be about 2.2 million barrels versus a 3.4 million barrel draw the previous week.

Daily Forecast

Helping to underpin the market is the tightening of global crude supplies, but it’s the U.S. gasoline number that could spike prices higher over the near-term.

Global supplies continue to tighten as buyers avoid oil from Russia, the world’s second-largest supplier. Additionally, the EU hopes to be able to agree on sanctions that would phase out Russian oil imports before the next meeting of the European Council, the council’s president, Charles Michel, said on Wednesday.

Meanwhile, the decline in gasoline stocks comes as demand for fuel will likely climb over the next several weeks due to the U.S. summer driving season.