US crude oil futures are trading lower in a choppy Wednesday session, despite the US government reporting a decline in domestic inventories. Crude oil prices have slowed down in recent sessions as financial markets monitor the explosion in coronavirus cases in the US and abroad.
February West Texas Intermediate (WTI) crude futures tumbled $0.18, or 0.34%, to $53.03 per barrel at 17:36 GMT on Wednesday on the New York Mercantile Exchange. Crude prices are off to a meteoric start in 2021, surging nearly 10% in the first two weeks of the calendar year.
Brent, the international benchmark for oil prices, is also lower in the middle of the trading week. March Brent crude futures shed $0.46, or 0.81%, to $56.12 a barrel on London’s ICE Futures exchange. Brent prices have also popped nearly 9% year-to-date.
According to the US Energy Information Administration (EIA), domestic crude supplies declined by 3.2 million barrels in the week ending January 8. This fell short of the market forecast of 3.8 million barrels.
Inventory levels at the Cushing, Oklahoma storage facility fell by 1.975 million barrels. Distillate supplies climbed 4.8 million barrels, while gasoline stockpiles jumped by 4.4 million barrels.
On Friday, the Baker Hughes oil rig count will be released, and it is widely expected that it will continue its upward trajectory. For 12 consecutive weeks, the crude oil rig count has been above 200 as the industry takes advantage of higher prices.
Could this be the start of a modest short-term pullback? Market observers think that problems over the rollout of the coronavirus vaccines and negative news on the global macro front could send oil prices lower. However, the consensus is that the US crude market is still heading toward $55 a barrel this summer.
Investors will also be monitoring the monthly meetings by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, which could trigger volatility at the start of each month.
In other energy commodities, March natural gas futures fell $0.014, or 0.52%, to $2.693 per million British thermal units (btu). February gasoline futures dipped $0.0065, or 0.42%, to $1.5465 a gallon. February heating oil futures dropped $0.0033, or 0.21%, to $1.5934 per gallon.