Oil prices rise as U.S. stockpiles shrink ahead of critical OPEC+ meeting
10:21 AM EDT, May 16, 2024
Oil prices on the New York fuel exchange are climbing, driven by a reduction in stockpiles, according to the latest report from the Department of Energy (DoE)—this is the buzz among brokers. OPEC+ will determine the following moves for global oil supplies.
According to the U.S. Department of Energy (DoE), last week saw a fall in U.S. crude oil inventories by 2.51 million barrels, or 0.55%, bringing the total to 457.02 million.
U.S. oil inventories on the decline
This marks the second week in which U.S. oil stockpiles have diminished, the first occurrence of this trend since March. Oil inventories in the United States have been at their lowest level since mid-April.
The DoE report also highlighted that gasoline inventories dropped by 235,000 barrels, or 0.1%, to 227.77 million last week.
Optimism among oil bulls
In the U.S., refineries are increasing their output in anticipation of the summer travel season, which typically kicks off with Memorial Day on May 27. This preparatory uptick in fuel production is significant, especially in the Midwestern U.S., where refineries are now processing 3.8 million barrels of oil daily - the highest seasonal level observed since 2018.
Crucial OPEC+ meeting ahead
In the meantime, a critical OPEC+ meeting is on the horizon. On June 1, oil ministers from the OPEC+ alliance will decide the future path for global oil supplies.
Expectations are leaning toward the 22 OPEC+ countries extending the current restrictions on oil supplies into the second half of 2024 as they convene in early June.
