While crude oil prices have dropped for the first time in three days, it could have been worse.
Earlier in yesterday's session, crude oil dropped as much as 2 percent as investors took profits from a strong two-day rally in crude oil prices driven mainly by optimism circulating that Britain will remain a member of the European Union after this Thursday’s referendum.
However, oil prices recovered considerably by the end of the session, supported by two main factors: the publication of this week's API (American Petroleum Inventory) report and news that the Royal Dutch Shell Plc (RDSa.L) shut a gasoline-producing fluidic catalytic cracking unit.
Supporting crude oil prices, this week’s API (American Petroleum Inventory) report revealed a much larger than expected decrease in crude oil inventories for the week ending on June 17. Inventories dropped by 5.2 million barrels (over 3 times the 1.7 million barrels forecasted by Platts' surveys).
Crude oil prices were also supported by a rise in gasoline prices after Royal Dutch Shell Plc (RDSa.L) shut its gasoline-producing fluidic catalytic cracking unit at the 316,600 barrel-per-day (bpd) Deer Park, Texas refinery. According to David Thompson, executive vice-president at Washington-based commodities broker Powerhouse, "The Deer Park news was certainly supportive to the market."
In the end, US benchmark West Texas Intermediate (WTI) for July delivery fell 52 cents to close at $48.85 US a barrel on the New York Mercantile Exchange, and London's Brent North Sea crude for delivery in August, the global benchmark, fell three cents to $50.62 US a barrel.
In the days to come, watch out for the following key catalysts for the crude oil market:
June 22nd
EIA (U.S. Energy Information Administration) Petroleum Status Report
EIA's 'This Week in Petroleum' report
June 23rd
EIA's weekly natural gas storage report
EIA's natural gas weekly update
June 24th
EU referendum results
Baker Hughes's US crude oil rig count
Baker Hughes's US natural gas rig count
