DTN Oil

Oil Gains in Midday Trade

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange added to gains in mid-morning trade Wednesday, with the front-month West Texas Intermediate contact trading as much as 4% higher in reaction to government data showing a second weekly decline in U.S. commercial crude-oil inventories while refining rates were at their highest since March.

Near 11:45 a.m. ET, NYMEX September WTI crude futures advanced $1.45 to $43.14 per barrel (bbl) and front-month ULSD futures traded up 3.46 cents to $1.2928 gallon. NYMEX RBOB September futures surged 3.24 cents or 2.7% to $1.2485 gallon.

Energy Information Administration data showed domestic crude stockpiles tumbled 7.4 million barrels to 518.6 million barrels, a fresh 16-week low yet about 16% above the five-year average. This compares with the American Petroleum Institute's reported 8.587 million bbl crude stock draw for the week ended July 31. Both reports were well above estimates for a decline of 3.1 million bbl from the prior week.

EIA data show large draw was realized even as crude exports slumped 392,000 barrels per day (bpd) from the previous week to 2.819 million bpd and imports increased 0.9 million bpd.

At the key Cushing supply depot in Oklahoma, the delivery location for the New York Mercantile Exchange West Texas Intermediate futures contract, inventory rose for a fifth consecutive week, up 532,000 bbl to 51.953 million bbl, a 10-week high.

The refining capacity utilization rate rose by 0.1% from the previous week to 79.6%, the highest level since the final week of March.

Gasoline stockpiles rose for the second week in a row, up by 419,000 barrels to 247.8 million barrels. Analysts expected a 2 million bbl decline.

Distillate stocks, which include heating oil and diesel fuel, rose by 1.6 million barrels to 180 million barrels, and are now about 27% above the five-year average, the EIA said. Analysts called for a decline by 1 million barrels from the previous week.

Gasoline demand continued to seesaw, erasing much of the prior week gain with a drop of about 200,000 bpd or 2.2% in the week profiled to 8.617 million bpd. Data show demand down 11% from the same time a year ago.

Total commercial petroleum inventories declined by 2.1 million bbl last week, EIA reported. Total products supplied over the last four-week period averaged 18.3 million bpd down 13.5% from the same four-weeks in 2019.

Liubov Georges can be reached at liubov.georges@dtn.com

Liubov Georges