Oil Holds Gain as US Fuel Stockpiles Decline Ahead of Driving Season, According to Bloomberg

Oil prices remained stable in Asia after experiencing their largest increase in four weeks, as US fuel inventories declined ahead of the summer driving season.

West Texas Intermediate futures hovered around $106 a barrel, following a rise of approximately 6% on Wednesday. Recent data indicated that US distillate stockpiles, which include diesel, dropped to their lowest level since May 2005 last week, while gasoline supplies decreased for the sixth consecutive week, according to the Energy Information Administration.

Although domestic fuel demand decreased last week, inventories are diminishing as US refiners boost exports to compensate for the shortfall of Russian oil. In light of the ongoing conflict in Ukraine, buyers are avoiding energy from the OPEC+ member, which has disrupted trade patterns and introduced significant volatility in the oil market.

Oil prices have surged nearly 40% this year, driven by a robust economic recovery from the pandemic. However, prices have experienced fluctuations since late February due to the war in Ukraine and a Covid-19 outbreak in China. Later today, the International Energy Agency is expected to release its overview of the global oil market.

According to EIA data released on Wednesday, US distillate inventories fell by 913,000 barrels last week, settling at 104 million barrels, while crude stockpiles increased by 8.5 million barrels. The US driving season is set to commence at the end of this month.