Oil futures retreated Wednesday, after the Biden administration said it would press the Organization of the Petroleum Exporting Countries and its allies to further boost output.
“We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices,” U.S. National Security Advisor Jake Sullivan said in a statement. “Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery.”
West Texas Intermediate crude for September delivery CL00, -1.76% CLU21, -1.76% fell 96 cents, or 1.4%, to $ 67.33 a barrel on the New York Mercantile Exchange. October Brent crude BRN00, -1.71% BRNV21, -1.71%, the global benchmark, dropped 92 cents, or 1.3%, to $ 69.71 a barrel on ICE Futures Europe.
The NSC statement said OPEC+’s agreement last month to lift production by 400,000 barrels a day in monthly increments beginning in August and running into 2022 was “simply not enough.”
The White House, in a letter, also directed the Federal Trade Commission to look into whether illegal practices were contributing to a rise in gasoline prices.
Retail gasoline prices averaged $ 3.14 a gallon in July, the highest since October 2014, the Energy Department’s Energy Information Administration said in a monthly report Tuesday, reflecting “rising crude oil prices and rising wholesale gasoline margins, amid relatively low gasoline inventories.”
September gasoline futures RB00, -1.71% RBU21, -1.71% fell 1.4% to $ 2.237 a gallon.
It’s shaping up to be a volatile week for crude, with prices tumbling to a three-week low on Monday and then reversing those losses in the Tuesday session.
“The volatility seen in oil markets is likely to be momentary as demand from Western countries is back to pre-pandemic levels and this is weighing in on global oil supplies,” said Naeem Aslam, chief market analyst at AvaTrade, in a note.
The American Petroleum Institute on Tuesday said U.S. crude-oil inventories fell 816,000 barrels last week, according to sources. Gasoline inventories were seen down 1.14 million barrels, while distillate stocks rose 673,000 barrels. Inventories at Cushing, Oklahoma, the delivery hub for Nymex oil futures, fell 413,000 barrels.
The EIA will release official weekly data Wednesday morning. Analysts surveyed by S&P Global Platts, on average, look for the EIA to show crude stocks down 600,000 barrels in the week ended Aug. 6, while gasoline stocks are expected to fall 2.4 million barrels and distillates are seen down 600,000 barrels.
September heating oil HOU21, -1.37% fell 0.9% to $ 2.06 a gallon.
September natural-gas futures NGU21, -1.91% were down 1.2% at $ 4.038 per million British thermal units.