US Crude, Gasoline Inventories Sink Again, But Prices Stay Flat

US crude oil and gasoline inventories continue to decline sharply, but the market is shrugging off the drawdowns as prices remain range-bound. The American Petroleum Institute (API) reported a 9.119 million barrel drop in crude inventories for the week ending June 5, far exceeding analyst expectations of a 3.4 million barrel draw. This marks the eighth consecutive weekly decline, totaling a massive 44 million barrels over the past two months. Despite these significant withdrawals, crude inventories are still up nearly 7 million barrels year-to-date, and gasoline inventories also posted a draw, though smaller than the previous week.

For energy traders, the persistent inventory draws typically signal a tightening market, which should support higher prices. However, WTI crude has failed to break out of its recent trading range, hovering around $70 per barrel. The disconnect suggests that the market is focusing on broader demand concerns, including slowing economic growth in China and the potential for higher interest rates in the US, which could dampen fuel consumption. Live fuel prices and charts on NowPrice show that the market is reacting more to macroeconomic headwinds than to supply-side tightness. Additionally, the crack spread for refiners remains under pressure, as gasoline demand has not picked up as strongly as expected during the summer driving season.

Looking ahead, traders will watch for the official Energy Information Administration (EIA) data due later this week for confirmation of the API figures. If the EIA reports a similar draw, it could provide some short-term support for prices. However, the key question remains whether demand will recover enough to absorb the current supply. OPEC+ production decisions and US strategic petroleum reserve releases will also be in focus. Any signs of a demand rebound could trigger a breakout, but for now, the market appears to be in wait-and-see mode.