Oil Futures Settle Sharply Lower

Despite data showing a drop in U.S. crude inventories for an eighth straight week, crude oil futures settled lower on Wednesday, weighed down by data showing a drop in gasoline demand.

Data showing a drop in China’s first-half crude imports also weighed on oil prices.

Oil prices also fell due reports that major crude producers Saudi Arabia and the United Arab Emirates have arrived at a compromise with regard to production levels.

However, according to several sources, the UAE has not reached any deal. The UAE energy ministry said in a statement that no deal with OPEC+ on its baseline has been reached and deliberations were continuing.

West Texas Intermediate Crude oil futures for August ended down by $2.12 or about 2.8% at $73.13 a barrel.

Brent crude futures shed about $1.7 or 2.3% at $74.76 a barrel.

Data released by Energy Information Administration (EIA) this morning showed crude inventories in the U.S. dropped by 7.9 million barrels in the week ended July 9, much higher than an expected declined of about 4.9 million barrels.

The EIA data also showed gasoline stockpiles increased by 1 million barrels last week, while distillate stockpiles rose by 3.7 million barrels.

The EIA data also showed crude stocks at the Cushing, Oklahoma, storage hub declined by 1.5 million barrels last week.

The American Petroleum Institute’s report late Tuesday showed crude oil inventories fell by 4.1 million barrels last week.

Data released by the General Administration of Customs showed on Tuesday that imports into China for the first half of 2021 totaled 260.66 million tons, or about 10.51 million bpd, down about 3% from last year.

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