DTN Oil

WASHINGTON (DTN) -- Nearby delivery month West Texas Intermediate and ULSD futures on the New York Mercantile Exchange surged in afternoon trade Wednesday with buying underpinned by larger-than-expected draws from U.S. commercial crude and distillate inventories, as well as a softer U.S. dollar and a rally by equities. Brent crude on the Intercontinental Exchange and prompt-month RBOB futures expired little changed under pressure from lackluster fuel demand globally and domestically.

On the last trading day of September and the third quarter, November West Texas Intermediate futures advanced 93 cents to settle just above $40 barrel (bbl) at $40.22 bbl, with November Brent futures on ICE expiring 8 cents lower at $40.95 bbl. The new front-month December Brent contract expanded its premium to $1.35 on the session to settle at $42.30 bbl. NYMEX October ULSD futures spiked 3.64 cents to $1.1454 a gallon before rolling off the board Wednesday afternoon, with November ULSD contract settling at $1.1522 gallon. October RBOB futures expired at $1.2008 gallon, near unchanged from Tuesday's settle, while the November contract narrowed its discount against the expired contract to 1.92 cents at $1.1816 gallon.

The U.S. Dollar Index reversed lower in afternoon trade Wednesday to slip below 94-level at 93.935 as stocks on Wall Street moved on offensive following upbeat comments on coronavirus relief package from the U.S. Treasury Secretary Steven Mnuchin and bullish jobs report from the private employment provider ADP. Details of the report show private employers added 749,000 new jobs in September vs. revised 481,000 month prior. Most of the jobs growth came from large businesses across service-providing sectors, up 552,000 on the month, followed by goods-producing sectors, up 196,000 new jobs. Upbeat employment report coincides with the data from Atlanta GDPNow tracker, showing gross domestic product grew at the rate of 32% in the third quarter, after the prior quarter's collapse of 31.7%. Investors now await Friday's non-farm jobs report with consensus calling for a fewer 894,000 new jobs added by the U.S. economy in September after 1.371 million jobs were created in August. This would be the last jobs report before the Nov. 3 presidential elections.

The first presidential debate held Tuesday night between President Donald Trump and contender former Vice President Joe Biden drew some criticism for the lack of orderly conduct while raising the risk of a contested election in November.

Energy Information Administration inventory snapshot released midmorning for the week ended Sept. 25 was mostly bullish, showing a third consecutive draw in U.S. crude oil stocks and a steep decline in distillate supplies, while gasoline inventories increased marginally. Crude oil stockpiles fell last week by a larger-than-expected 2 million bbl to the lowest level since early April at 492.4 million bbl, although stockpiles still remain 16.5% above the year ago. U.S. refiners increased throughputs by 300,000 barrels per day (bpd) from the previous week to 13.67 million bpd. Distillate inventories plummeted 3.2 million bbl to a 4-month low 172.8 million bbl. Implied demand for distillate fuels, however, remained lackluster, falling 112,000 bpd from the previous week to 4.358 million bpd.

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

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