U.S. crude oil futures reached new highs as data revealed a significant decrease in gasoline inventories and robust fuel demand ahead of the summer driving season.
The prices were also influenced by concerns about potential conflict in the Middle East following Iran's vow to retaliate against an Israeli strike in Syria. OPEC+ announced that it would maintain its output cuts until the end of June as expected, with participating countries that have exceeded production limits expected to submit compensation plans by the end of the month. Front-month Nymex crude for May delivery closed at $85.43/bbl, while front-month June Brent crude finished at $89.35/bbl, marking the highest settlement values for both benchmarks since October 27. Various energy companies, including Antero Midstream, Canadian Natural Resources, and ConocoPhillips, achieved new intraday 52-week highs during the trading session.
The U.S. reported a build of 3.2 million barrels in domestic crude stocks, but gasoline inventories saw a larger-than-expected drawdown of 4.3 million barrels, which was attributed to strong demand reminiscent of the summer season. The Energy Information Administration's estimate of finished motor gasoline supplied, reflecting demand, increased by 521,000 bbl/day to 9.236 million bbl/day. This rise, according to Mizuho's Robert Yawger, suggests strong fundamentals in gasoline demand that could drive prices higher in the upcoming weeks based on demand rather than geopolitical events.
Additionally, the U.S. Department of Energy announced that it would not award oil supply contracts for Louisiana's Bayou Choctaw Strategic Petroleum Reserve site in August and September due to elevated oil prices.