Dear Readers, We deeply regret having been offline for several days due to a technical issue that has now been resolved. 
Mayra P. Saefong, William Watts, MarketWatch
SAN FRANCISCO/NEW YORK
EnergiesNet.com 06 15 2022
Oil futures fell on Wednesday to their lowest settlement in two weeks, as U.S. crude inventories climbed for a second straight week and the Federal Reserve announced its largest interest-rate increase in almost 30 years in a move to combat inflation.
Price action
- West Texas Intermediate crude for July delivery CL.1, -0.56% CL00, -0.56% CLN22, -0.56% fell $3.62, or 3%, to settle at $115.31 a barrel on the New York Mercantile Exchange, the lowest for a front-month contract since June 1, according to Dow Jones Market Data.
- August Brent crude BRN00, -0.68% BRNQ22, -0.68%, the global benchmark, lost $2.66, or 2.2%, to $118.51 a barrel on ICE Futures Europe, the lowest finish since June 2.
- Back on Nymex, July gasoline RBN22, -0.05% fell 2.5% to $3.8942 a gallon.
- July heating oil HON22, -1.01% added 3.5% at $4.547 a gallon.
- July natural-gas futures NGN22, +3.18% rose 3.2% to $7.42 per million British thermal units, after losing more than 16% Tuesday to end at a five-week low.
Market drivers
On Tuesday, a number of factors were cited as a drag on crude, with some analysts attributing the softness as largely tied to jitters over the Fed. Other factors included optimistic remarks around the Iran nuclear deal, a waiver extension allowing U.S. banks to process Russian energy transactions, and a report that a U.S. senator intends to propose a federal surtax on certain oil companies in a move to curb inflation.
It appears that market participants got cold feet ahead of Wednesday’s Fed decision, as “a stronger tightening of monetary policy could have negative effects on oil demand,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.
On Wednesday, the Fed lifted the fed-funds rate by 75 basis points, or three-quarters of a percentage point, as had been widely expected.
Oil prices extended their losses after the Fed announcement. U.S. benchmark stock indexes continued to trade higher, but if the markets reverse, crude prices could go lower, Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch. Still, “we feel crude will return to its upward move once the equity and bond markets settle down.”
The International Energy Agency on Wednesday said it expects global demand for oil to rise above pre-pandemic levels next year following three years of COVID-19 lockdowns and the economic shock of the Ukraine war. Much of the growth in demand next year will be driven by China, as it emerges from stop-start COVID-19 lockdowns, while developed economies are expected to contend with a worsening economic outlook and rampant inflation, the Paris-based agency said in its monthly report.
President Joe Biden on Wednesday wrote letters to U.S. oil refiners, calling on them to produce more gasoline and diesel and saying their profits have tripled during a time of war between Russia and Ukraine as Americans struggle with record high prices at the pump.
Natural-gas futures climbed Wednesday, staging a partial rebound after a more than 16% drop a day earlier to their lowest in five weeks as a delay in repairs to Freeport LNG Development’s liquefaction plant on Quintana Island on Texas’s Gulf Coast was expected to lead to higher inventories of the commodity in U.S. storage.
Oil supply data
On Wednesday, the Energy Information Administration reported that U.S. crude inventories rose for a second straight week, by 2 million barrels for the week ended June 10.
The EIA was expected to show crude inventories down by 1.1 million barrels on average, according to analysts surveyed by S&P Global Commodity Insights. The American Petroleum Institute on Tuesday reported a 736,000-barrel increase, according to sources.
The EIA reported a weekly inventory decline of 700,000 barrels for gasoline, while distillate supplies climbed by 700,000 barrels. The S&P Global Commodity Insights survey had forecast an increase of 100,000 barrels for gasoline and an inventory decline of 300,000 barrels for distillates.
The EIA data showed crude stocks at the Cushing, Okla., Nymex delivery hub edged down by 800,000 barrels for the week, while stocks in the Strategic Petroleum Reserve fell to 511.6 million barrels from 519.3 million the week before.
marketwatch.com 06 15 2022
