Meanwhile, the AAA suggest that cheap gas prices could mean more U.S. travel: File Image/Pixabay
Following the previous session's gains due to higher than expected U.S. inventory draws, crude prices on Wednesday rose again, this time due to the Energy Information Administration corroborating the American Petroleum Institute's earlier calculation of an 11.1 million barrel decline in stocks.
On word from the EIA's report that crude stocks in fact fell last week by 10 million, Brent settled up 98 cents at $60.49 per barrel; West Texas Intermediate ended at $55.78 per barrel, rising 85 cents.
John Kilduff, founding partner at Again Capital, summarized the EIA's findings: "It was an incredibly bullish report, one of the more bullish we've had in a while, with draws across the board and of course the massive crude oil drop, which was generated by another drop in imports."
John Kilduff, founding partner, Again Capital
It was an incredibly bullish report...with draws across the board
According to the AAA, further drawdowns may be impending: the Association on Wednesday revealed that the average price of gas in the U.S. of just more than $2.58 per gallon is 25 cents cheaper than during the Labour Day weekend last year, when it was $2.83, and 5 cents cheaper than the same period in 2017 ($2.63).
Gas prices dropped in every U.S. state other than Hawaii compared to Labour Day 2018, and Jeanette Casselano, spokesperson for AAA, noted that "When gas prices are cheaper, we tend to see more people traveling."
Still, analysts' concerns about the prospect of a global economic slowdown are never far from being discussed, and on Wednesday Morgan Stanley lowered its oil price forecasts for the rest of the year citing a weaker economic outlook, faltering demand, and higher shale growth that could offset the Organization of the Petroleum Exporting Countries' (OPEC) efforts to support the market.
The bank cut its 2019 Brent price forecast to $60 per barrel from $65, and cut its WTI outlook for the third and fourth quarters of this year to $55 from $58; it also lowered its 2019 oil demand growth outlook to 800,000 barrels per day (bpd) from 1 million bpd, and its 2020 forecast to 1 million bpd from 1.4 million bpd.