Crude oil eased on Thursday morning giving up 27 cents to trade at 102.37 after the release of the official EIA inventory and a mixed day of economic data in the US. The failure of both benchmarks to rise above resistance levels on technical charts also depressed prices. Brent's premium to West Texas Intermediate crude on Wednesday fell below $6, it’s narrowest since 15 April, after crude stockpiles in the US dropped more than expected on lower imports and higher refinery utilization rates. Brent oil on the other hand is in the green this morning at 108.34.
The commodity began edging down yesterday although a report showed that crude inventories declined last week. For the week ended May 30, nationwide crude stockpiles in the United States decreased 3.4 million barrels to 389.5 million, beating market’s expectation of a 250,000-barrel drop, according to the Energy Information Administration.
Stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell 321,000 barrels to 21.4 million. Cushing stockpiles have slipped from 41.8 million barrels in late January as the southern leg of the Keystone XL pipeline started to transport crude to Gulf Coast refineries. WTI crude production dropped 89,000 barrels to 8.383 million barrels per day.
U.S. economic data came in mixed Wednesday. U.S. private sector employment increased by 179,000 jobs in May, according to a report released Wednesday by private payroll processor ADP. The fresh data fell short of analysts’ expectations of a gain of 210,000.
The Institute for Supply Management (ISM) said economic activity in the U.S. non-manufacturing sector grew in May for the 52nd consecutive month. The reading of 56.3 for May was well above expectations for 55.5.Capping gains, however, was news from payrolls firm ADP that the US private sector had added its lowest number of jobs for four months. While the news didn’t cause too much market anxiety, it has dampened expectations for the official jobs report at the end of the week. Another negative influence was a report showing the US trade deficit had jumped 6.9 per cent in April, well above projections for a 2.2 per cent lift.
WTI prices dipped after Russian President Vladimir Putin reached out a hand to crisis-hit Ukraine, raising hopes of an easing in the worst East-West standoff since the Cold War. Putin said he was ready to meet Ukraine’s newly elected president Petro Poroshenko as well as Western European leaders at the sidelines of World War II ceremonies in Normandy, France.
G-7 leaders, meeting without Putin as Russia was ejected from the G8 grouping in March; however urged Moscow to stop destabilizing Ukraine or face further sanctions. The West has accused Russia of fomenting unrest in neighboring Ukraine since the ousting of pro-Kremlin president Viktor Yanukovych in February. Moscow denies the allegation.