As the U.S. gears up for its peak season for road travel, drivers are being treated to lower gas costs. Oil prices fell 3 percent on June 3, resulting in a five-week decline in national crude stockpiles, according to Reuters. Investors and traders are seemingly ignoring this decrease and are choosing to focus on building a larger amount of distillates, such as diesel and heating oil.
Following a two-day seminar with the chief executives of BP and Exxon, the Organization of the Petroleum Exporting Countries will meet on June 5 and discuss its decision to abandon their efforts to keep oil prices at more than $100 a barrel in favor of supporting the market share value of barrels instead.
OPEC is expected to reject any calls for oil output cuts. OPEC, which pumps more than a third of the world's oil, is thought to continue their production of about 2 million barrels of fuel per day above demand. This amount is more than OPEC's oil ceiling. Raising this limit will be a topic of discussion during the June 5 meeting as well.
OPEC ministers in Vienna, Austria, supported this idea with comments stating that Middle East oil producers will continue to pumping as much oil as permissible for the months to come.
According to the U.S. Energy Information Administration's Petroleum Status weekly report, distillate stockpiles were up by 3.8 million barrels compared to earlier projections of 1.1 million barrels. On the other hand, although a fall of only 1.7 million barrels was predicted last week, U.S. crude inventories fell 1.95 million barrels.
American drivers may be benefiting from the lower gas prices, but the relationship between the rise in distillate stockpiles and decrease in crude inventories showcases the demand for oil across the world. OPEC's meeting will decide whether global oil refineries will continue to pump above the ceiling or not.