Oil execs warn of higher prices as crude stockpiles continue to dwindle

(Originally published May 29 in “What in the World“) U.S. crude oil inventories continue to dwindle.

The U.S. Energy Information Administration (EIA) released data Thursday showing that commercial stockpiles dropped almost 1%, or 3.3 million barrels, last week, to 441.7 million barrels. That’s 2% below the five-year average for the same period. Chevron CEO Mike Wirth warned yesterday at a conference in New York that oil prices are likely to climb over the next two months as oil inventories continue falling. Exxon Senior Vice President Neil Chapman said at the same conference that inventory levels were headed to “unheard of” lows in the next two to three weeks.

While U.S. officials continued to tout progress towards reopening the Strait of Hormuz and negotiating a peace deal, the war on Iran seemed to intensify. U.S. forces retaliated Thursday against an Iranian drone attack against four ships attempting to traverse the Strait of Hormuz. The U.S. responded by striking an Iranian drone launch base near Bandar Abbas, prompting Iran’s Revolutionary Guard to launch drones against a U.S. base in Kuwait.

Israel, meanwhile, continued to step up its offensive in Lebanon against the Iran-backed Hezbollah militia, striking an apartment building in Beirut’s suburbs. Iran has demanded Israel cease strikes against Hezbollah as a prerequisite for any peace deal.