Oil prices managed to stay higher on Wednesday, despite an unexpected jump in U.S. inventories and a firm speech from the Federal Reserve (Fed), still concerned about inflation.
The price of a barrel of Brent crude from the North Sea for August delivery rose 0.83%, closing at $82.60.
The barrel of U.S. West Texas Intermediate (WTI) with a July maturity gained 0.77%, to $78.50.
Early Momentum, Followed by Setbacks
Black gold gained momentum early in the day, thanks in part to the estimate from the American Petroleum Institute (API), which anticipated a reduction of 2.4 million barrels in U.S. commercial oil stocks on Tuesday.
The momentum was further affirmed after the release of the Consumer Price Index (CPI), which showed stability between April and May, while economists saw inflation at 0.1%.
This better-than-expected figure is mainly due to the decline in energy prices, which contracted by 2% over a month.
And the decline is currently continuing. The average price of gasoline in the United States has thus melted by 6.5% since mid-April.
But the climate deteriorated for black gold after the publication of the report on U.S. stocks which, contrary to what the API announced, highlighted an increase of 3.7 million barrels of crude oil reserves during the week ending June 7.
Traders were also not very fond of the Fed’s firm speech, for which progress towards the institution’s long-term goal of 2% annual inflation has been only “moderate” in “recent months.”
At his press conference, Fed Chairman Jerome Powell delivered a cautious speech, stating, among other things, that wage growth was still “above a sustainable trajectory.”
Oil Prices Hold Steady
However, despite a clear slowdown, crude oil prices managed to stay in the green and post a fifth session of gains in six trading days.
For Phil Flynn of Price Futures Group, if the main figure of the report of the U.S. Energy Information Administration, i.e. the increase in stocks, “is disappointing, (…) once you dissect the data, everything is not bad.”
The analyst mentioned the strengthening of gasoline consumption (+1% over a week) and distillates (+8%), a category that includes diesel.
For him, the report contained many elements difficult to grasp, from a sharp increase in imports to massive statistical adjustments. “People are wondering” about the conclusions to be drawn, he summarized, explaining the limited impact of this publication on prices.