US crude oil production to decline further

A report published by the US Energy Information Administration (EIA) at the beginning of the week had already indicated a further reduction in US shale oil production. 

It is expected to fall in August by 91,000 barrels per day as compared with the production level envisaged in July. This would see shale oil production decreasing for the fourth consecutive month to its lowest level since November 2014. 

By contrast, US gasoline demand fell for the second week running. The gasoline crack spread thus continued to fall yesterday, which may serve to explain the weak price.

Furthermore, it remains to be seen how long crude oil processing will stay at its current extremely high level. Clearly there was less driving activity around the Independence Day holiday than had been anticipated, says Commerzbank.