U.S. oil prices and energy stocks, such as ExxonMobil, Chevron, and Occidental Petroleum, experienced a decline on Wednesday. This was in response to the Energy Information Administration’s (EIA) report, which revealed that while crude oil inventories decreased by over 2 million barrels last week, gasoline stockpiles had increased. The decrease in oil prices was significant, with West Texas Intermediate (WTI) oil prices falling by 4.6% to $84.60 per barrel. Additionally, the average price of gasoline at the pump was $3.78 per gallon, indicating a slight decrease compared to the previous year.
The EIA data showed that U.S. crude oil inventories were about 5% below the five-year average, indicating a decrease in supply. However, total motor gasoline inventories increased by 6.5 million barrels and were approximately 1% above the five-year average. Furthermore, gasoline demand dropped from 8.62 to 8.01 million barrels per day, reflecting a decline in consumer demand compared to the previous year. As a result, gasoline futures fell by 6.7%, suggesting that there may be further declines in gasoline prices in the upcoming weeks.
The decline in oil prices has had a direct impact on energy stocks. ExxonMobil, Chevron, and Occidental Petroleum all saw a decrease in their stock prices. These energy stocks had been rallying since June, following a decline from the highs of 2022 caused by Russia’s invasion of Ukraine. However, the future demand for oil remains uncertain, considering China’s struggling economy and the unresolved battle against inflation in the United States. Refinery stocks, including Valero Energy, are also facing challenges as the “crack spread” between crude and gasoline prices narrows.
