Crude oil closed slightly lower on June 9 as an increase in US refined oil inventories cast a shadow over the prospect of a strong rebound in demand during the summer driving season. Domestic gasoline inventories rose by more than 7 million barrels last week, the biggest increase since April 2020, according to US government data, while refined oil stocks also rose, while the country entered the traditional peak of gasoline consumption last week. but the rolling average of gasoline demand fell for the first time in a month.

Crude oil inventories plunged 5.2 million barrels in the week to June 4, according to data released by the US EIA on Wednesday, but inventories of gasoline and other oil products rose sharply due to weak demand, with consumption falling to 17.7 million barrels a day from 19.1 million barrels a day the week before.

As can be seen from the EIA report, US crude oil inventories are showing positive signs, recording 11 consecutive weeks of decline, the most since 2017, and overall crude oil inventories are currently below the five-year average. But on the demand side, the rolling average of gasoline demand fell for the first time in four weeks, which worried the market. The decline in WTI crude oil widened after the release of the data.

John Kilduff, a partner at Again Capital LLC, said this could be an early warning sign when economic activity was at its peak, but it was too early to tell. However, other analysts pointed out that bad weather on the US east coast may have reduced gasoline consumption after people hoarded gasoline during last month's blackout software attack on Colonial Pipeline, artificially boosting demand. Gary Cunningham, director of Tradition Energy, pointed out that oil prices have performed well recently because we have seen a rebound in demand, but the rebound in demand is not strong enough to push oil prices significantly above $70.

At present, the market is focused on the resumption of Iran's nuclear agreement talks within a few days. According to the official website of Iran's Oil Ministry, Shana, officials of Iran's National Oil Company say Iran will fully resume oil production within three months after the sanctions are lifted, and most of its oil production will be restored within one month after the sanctions are lifted. Although uncertainty about the Iran nuclear deal remains high, the market is more willing to take profits on crude oil that continues to rise sharply under the key market window, with WTI crude falling back from the year's high of $70.60 on Wednesday, finally losing the $70 mark and falling to an intraday low of $69.48.

In the case of increased uncertainty on the supply and demand side of crude oil, the market focus may shift to the overall liquidity issue, especially the announcement of the US CPI, in May is expected to provide investors with more clues about rising inflation and Fed monetary policy. It is worth noting that while expectations of a sharp surge in inflation have fallen, the market's pursuit of risky assets seems difficult to maintain after the Fed has repeatedly hinted at tightening QE in the second half of the year.

During the day, we will focus on the non-quarterly CPI annual rate of the United States in May, the number of Americans applying for unemployment benefits in the week ending June 5, and Iran's nuclear negotiations.

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