- Gasoline and distillate inventories both fell last week
- Fuel demand is returning slowly as cities re-open across U.S.
Further evidence that fuel demand is staging a gradual comeback in the world’s biggest economy was eclipsed by another increase in overall inventories, showing the market is still grappling with a huge supply glut.
Gasoline and distillate inventories fell last week, according to a report from the Energy Information Administration, reflecting a slight pick-up in demand during the summer driving season with coronavirus-led lockdowns easing in some parts of the U.S.. However, stubbornly high crude inventories threaten to put a floor under crude’s rally from historic lows in April.
“The distillate draw is a clear sign of the reopening of the economy and transportation returning,” said Rob Thummel, portfolio manager at Tortoise. “We still need to see inventories come down. That’ll be the catalyst for oil prices to move higher.”