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Explore the latest trends and actionable insights on the US Crude Oil Refinery market to inform business strategy and pinpoint opportunities and risks

Oil Prices Soar Again - US Crude at 13-Week High

Industry: Oil&Gas Exploration & Production
Current: Other Industry Indicators

Oil prices increased 1% on 7th June, with US crude settling at a 13-week high
Brent futures gained $1.06, or 0.9%, over that on 6th June, to settle at $120.57 a barrel, its highest since May 31
US West Texas Intermediate (WTI) crude gained 91 cents, or 0.8%, to increase to $119.41, its highest settlement since March 8, matching an August 2008 settlement high

Brent crude futures rose above $120 a barrel, nearing a 14-year low set in March 2022, owing to tight global supply and the prospect of higher demand due to China's COVID-19 curbs and the US summer driving season. Markets also anticipate the announcement of official US crude inventories, which are expected to show another fall from the previous week, although gasoline and distillate supplies could increase.

Is the US Running Short on Crude Inventories?

For the week ended June 2, 2022, oil inventory in the US increased by nearly 1.8 million barrels. In the same week, the US crude oil stocks grew, defying forecasts of a drop at a time when fears of a supply crisis were rising as summer driving picked up and jet fuel prices recovered, pushing up the demand. In data due on June 8, the US crude oil inventory is expected to have fallen from that in the previous week, causing a jump in oil prices.

Risk Posed by Russia

Russian oil production has already been hampered by EU sanctions. Given Europe's decision in May to prohibit Russian oil imports by sea, besides a looming ban on vessels transporting Russian oil accessing EU and UK insurance markets, the output is projected to fall further.

OPEC+ Alliance to the Rescue

With the EU embargo on Russian oil, the OPEC+ alliance agreed on June 2 to increase output over the summer, soothing US policymakers. The decision was welcomed by the US authorities. The OPEC+ agreement is likely to enable the already scheduled increase in September production to be advanced to July and August.

Outlook

As a result of Western sanctions, global crude and oil product supplies remain tight, hampering shipments from Russia, the world's largest producer. To meet the increase in demand owing to recovery from the pandemic, and replace the reduced Russian supply, most refineries globally are already nearing capacity. The US government's oil inventory restocking could increase if the additional Middle East capacity backed by the OPEC+ alliance comes up swiftly.

Explore the latest trends and actionable insights on the US Crude Oil Refinery market to inform business strategy and pinpoint opportunities and risks Explore the latest trends and actionable insights on the US Crude Oil Refinery market to inform business strategy and pinpoint opportunities and risks Visit Report Store