DTN Oil Update
Oil Futures Surge on US Crude Stocks Decline Last Week
SECAUCUS, N.J. (DTN) -- Oil futures surged on Wednesday, Oct. 22, after the U.S. Energy Information Administration reported across-the-board draws in stockpiles of crude and fuel products for the week ended Oct. 17.
NYMEX WTI futures for December delivery settled up $1.26, or 2.2%, at $58.50 bbl. ICE Brent for December delivery rose $1.27, or 2.1%, to $62.61 bbl. WTI and Brent are up more than 2% week-to-date after straight losses in three prior weeks.
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Downstream, November RBOB gasoline futures climbed $0.0393 to $1.8646 gallon, while the front-month ULSD futures contract rose $0.0414 to $.2472 gallon.
The U.S. Dollar Index dipped by 0.076 points to 98.635 against a basket of foreign currencies.
U.S. commercial crude oil inventories fell last week for the first time in four weeks, decreasing by 1 million bbl to 422.8 million bbl, the EIA reported. In the prior week, there was a weekly build of 3.5 million bbl.
Crude stocks at Cushing, Oklahoma, the delivery point for WTI futures, dropped by 800,000 bbl to 21.2 million bbl, marking a fourth consecutive weekly draw.
Gasoline stocks fell by 2.1 million bbl to 216.7 million bbl. Distillate fuel oil inventories slid by 1.4 million bbl to 115.6 million bbl, adding to the prior week's 4.6 million bbl draw.
The bullish sentiment in the oil futures market was supported by the U.S. Energy Department announcement that it will buy nearly 1 million bbl of crude for the Strategic Petroleum Reserve.
Crude prices rallied after U.S. President Donald Trump held a phone conversation with Indian Prime Minister Narendra Modi on Tuesday to discuss trade and the possibility that India -- one of the major consumers of Russian crude -- could wind down purchases from that country.
Separately, a planned Budapest summit between Trump and Russian President Vladimir Putin to discuss the end of the Ukraine war, originally scheduled for late October, has been postponed, according to media reports. The oil market is focused on the summit as a Russia-Ukraine ceasefire could lead to the lifting of U.S. and the European Union sanctions on Russian oil trade. Additional Russian barrels would put downward pressure on oil prices.
