WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange posted gains Wednesday afternoon, with West Texas Intermediate settling up over 2% on a larger-than-expected draw in U.S. crude inventories. Plans to shut down the Philadelphia Refinery Complex offered additional market support.
NYMEX August West Texas Intermediate surged $1.55 to settle at $59.38 per barrel (bbl), while ICE August Brent futures were up $1.44 at $66.49 bbl, with both contracts ending the session with the highest settlement since the last week of May.
NYMEX July RBOB futures spiked 9.32 cents to $1.9704 a gallon, a fresh better-than-five-week spot high on the news that Philadelphia Energy Solutions plans to shutter the 335,000-barrel-per-day (bpd) PRC, comprised of the Girard Point and Point Breeze plants, within the next month.
PES CEO, Mark Smith issued a statement, "Today, Philadelphia Energy Solutions made the difficult decision to commence shutdown of the refining complex. The recent fire at the refinery complex has made it impossible for us to continue operations."
Smith continued, "As part of the wind down, the company will position the refinery complex for a sale and restart".
PRC, the largest refinery on the East Coast, suffered an extensive fire on June 21 which disrupted refinery operations and sent NYMEX RBOB futures sharply higher. The facility was a key supplier to New York/New Jersey markets, which will likely become more dependent on suppliers from Canada, Europe and Gulf Coast.
NYMEX July ULSD futures were up 1.45 cents at $1.9234 gallon at settlement.
The Energy Information Administration reported midmorning a sizable 12.8 million bbl drop in U.S. crude inventories in the week ended June 21, surpassing market expectations and nearly twice as large of a draw reported by American Petroleum Institute on Tuesday. Government data also showed the crude production rate eased again by 100,000 bpd last week to 12.1 bpd, a third straight weekly decline. EIA reported U.S. crude oil imports averaged 6.7 million bpd during week profiled, down 812,000 bpd from the previous week. Over the last four weeks crude oil imports averaged about 7.4 million bpd, 10.2% less than the same four weeks in 2018.
In refined products, EIA said gasoline inventories declined 995,984 bbl on the week, which is 3.7% lower than the same week last year. Gasoline production moved higher in the week profiled, while implied gasoline demand dropped for the first time in four weeks, falling 462,000 bpd from a record high.
Distillate fuel inventories were again drawn down, falling 2.4 million bbl and distillate fuel production fell 66,000 bpd. Implied demand for distillates was again lower, down 93,000 bpd to 3.968 million bpd as of June 21, about 10% higher than the same week in 2018.
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