U.S. oil prices and energy stocks, including ExxonMobil (XOM) along with Warren Buffett-backed Chevron (CVX) and Occidental Petroleum (OXY), fell Wednesday as the Energy Information Administration’s (EIA) reported crude oil inventories decreased by more than 2 million barrels last week, but swelling gasoline stockpiles.
West Texas Intermediate (WTI) oil prices slipped 4.6% to $84.60 per barrel Wednesday, after hitting $93 per barrel last week. The EIA announced Wednesday morning that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.2 million barrels last week. At 414.1 million barrels, U.S. crude oil inventories are about 5% below the five-year average.
Late Tuesday, the American Petroleum Institute said U.S. crude inventories fell by about 4.2 million barrels last week, far exceeding forecasts for a 92,000 barrel draw.
Meanwhile, total motor gasoline inventories increased by 6.5 million barrels last week and are about 1% above the five-year average, according to the EIA data. Gasoline demand fell last week from 8.62 to 8.01 million barrels per day. That’s down from demand of 9.46 million barrels per day a year ago, according to the EIA.
The average price of gasoline at the pump was $3.78 per gallon Wednesday, according to AAA data. That’s down less than 1% vs. last year. Retail gas prices are starting to cool after rising significantly in late summer.
Gasoline futures fell 6.7% Wednesday, now at the lowest level in 2023. That suggests further declines at the pump in the coming weeks.
Meanwhile, the OPEC Joint Ministerial Monitoring Committee also met for its regular market monitoring meeting. Saudi Arabia reaffirmed Wednesday it will maintain its voluntary production cut of 1 million barrels per day until the end of 2023.
ExxonMobil Stock, Energy Stocks Follow Oil Prices
XOM along with other energy stocks angled lower early Wednesday during market trade.
Energy stocks have followed oil prices, rallying since June, after a fall off from 2022 highs driven by Russia’s Ukraine invasion. U.S. oil producers and the Saudi Arabia-led Organization of Petroleum Exporting Countries and its partners have kept global oil supplies tight. But the outlook for demand remains uncertain, with China’s economy struggling, and the outcome of the U.S. battle vs. inflation yet to be determined.
XOM dropped 3.8% to 111.42 Wednesday. On Tuesday, ExxonMobil stock edged up 0.2% to 115.83 but after tumbling below a buy point over the prior three sessions. Chevron stock also fell 2.4% Wednesday after gaining 0.2% to 166.93 Tuesday.
Refinery stocks are struggling as the “crack spread” between crude and gasoline prices narrows. Valero Energy (VLO) fell 3.6% Wednesday. On Tuesday, VLO stock sank 3.3% to 133.58, breaking below the 50-day line as part of a three-day sell-off.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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Barbara Terrio is a seasoned business journalist, delving into the world of finance, startups, and entrepreneurship. With a knack for demystifying complex economic trends, she helps readers navigate the business landscape. Outside of her reporting, Barbara is an advocate for financial literacy and enjoys mentoring aspiring entrepreneurs.