Crude oil continues to decline
After declining for five consecutive trading days, crude oil started Thursday on a negative note due to weaker-than-expected inventory data amid global economic concerns. At 6:02 AM EST on June 16, the West Texas Intermediate crude oil futures contract for July delivery was trading at $47.44 per barrel—a drop of 1.2%. Brent crude was trading at $48.38—a drop of 1.2%. The slight recovery in the US dollar also weighed on crude oil prices this morning.
Weaker-than-expected inventory data
Even though the inventory data reported by the EIA (U.S. Energy Information Administration) showed a drawdown in crude oil inventories in the week ending June 10, it’s less than the Market’s expectations. According to the data released by the EIA at 10:30 AM EST on June 15, crude oil declined by 0.93 MMbbls (million barrels). This is less than the Market’s expectations of 2.26 MMbbls. In the previous report, the EIA reported a drawdown of 3.23 MMbbls of crude oil stocks. The lower-than-expected drawdown in inventories disappointed the Market and weighed on the crude oil price this morning.
Decline in US crude oil production
The US crude oil production declined by 29,000 bpd (barrels per day) in the last week and reached 8.72 MMbpd (million barrels per day). Even though this is supportive news for crude oil, Brexit vote concerns along with disappointing inventory data overshadowed the positive data. The week before, the US crude oil production dropped by 10,000 bpd to 8.75 MMbpd. On June 15, major crude oil producer Carrizo Oil & Gas (CRZO) declined 0.95%. Canadian Natural Resources (CNQ), British Petroleum (BP), and Total S.A. (TOT) gained 0.54%, 0.71%, and 0.15%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) gained 0.17%. The Power Shares DB Oil ETF (DBO) declined 1.2%.