DTN Oil Update
Oil Prices Rise as US Fuel, Cushing Crude Stocks Decline
VIENNA (DTN) -- Oil prices advanced around 1.5% on Wednesday, Oct. 8, morning trade as market participants responded to lower U.S. fuel inventories and a sizeable drop in crude oil stockpiles at the Cushing storage hub reported by the American Petroleum Institute.
In crude oil futures, NYMEX-traded WTI for November delivery rose $0.95 to $62.69 bbl, while ICE Brent for December delivery gained $0.90 to $66.35 bbl.
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November RBOB gasoline futures advanced $0.0265 to $1.9205 gallon, and front-month ULSD futures rose $0.0201 to $2.2854 gallon.
The U.S. Dollar Index strengthened by 0.256 points to 98.54 against a basket of foreign currencies, the highest since late August.
Crude inventories at Cushing, Oklahoma, the delivery point for NYMEX West Texas Intermediate futures, fell by 1.152 million bbl last week, according to an API report Tuesday, Oct. 7.
Gasoline inventories fell by 1.245 million bbl in the week ending Oct. 4, reversing the previous week's build, and distillate fuel stocks shrank by 1.822 million bbl, API added.
Nationwide commercial crude oil stocks, in contrast, expanded by 2.78 million bbl last week, according to API.
Market participants will check those figures against official government oil inventory data due from the U.S. Energy Information Administration at 10:30 a.m. EDT today.
Oil prices have partially recovered so far this week from last week's 8% drop on fears of oversupply from OPEC+ production hikes. OPEC+'s smaller-than-expected output increase for November, however, alleviated those concerns, leading to an upward correction to some of last week's overselling.
Still, the potential for weaker demand has kept the market's potential for advance in check. The day after OPEC+'s modest output hike, Saudi Aramco issued official selling prices for November, leaving prices for light barrels to Asia unchanged and cutting prices for medium and heavy crude oil grades.
The move by the Saudi state oil firm was interpreted as yet another sign of caution, hinting that its demand growth expectations may be at odds with its publicly communicated bullish forecasts.