Oil skids as start of U.S. summer driving season fails to lift fuel demand | Reuters

Oil skids as start of U.S. summer driving season fails to lift fuel demand | Reuters

Oil prices fell on Thursday as inventory data in the United States, the world’s top oil consumer, showed a surge in gasoline stocks that indicates weaker-than-expected fuel demand at the start of summer, the country’s peak season for motoring.

Brent crude oil futures were down 55 cents, or 0.8%, at $71.67 a barrel by 0341 GMT, while U.S. oil futures declined by 53 cents, or 0.8%, at $69.43 a barrel.

“Markets had been optimistic on demand as the U.S. enters the peak summer driving season,” analysts from ANZ Research said in a note on Thursday.

“An acceleration in (coronavirus) vaccinations and rising traffic numbers are a plus for demand for transportation fuel. However, this data highlights it won’t be a smooth road back to recovery.”

U.S. crude oil stockpiles that include the Strategic Petroleum Reserve (SPR) fell for the 11th straight week as refiners ramped up output, but fuel inventories grew sharply due to weak consumer demand, the Energy Information Administration (EIA) said on Wednesday.