NEW YORK (DTN) -- New York Mercantile Exchange oil futures advanced across the board after the U.S. Energy Information Administration issued a report showing a larger-than-expected weekly draw from domestic crude oil inventory.
At 9:50 a.m. CDT, NYMEX September West Texas Intermediate crude futures rallied 92 cents to $48.90 bbl while ICE Brent futures rose 61 cents to $53.91 bbl. The NYMEX August ULSD contract inched 0.95 cents higher to $1.6139 gallon while the NYMEX August RBOB contract added 0.45 cents to $1.8077 gallon.
The oil complex was trading lower before the EIA released its report that detailed a 4.2 million bbl stock draw for crude oil during the week ended July 24, more than double an expected 2.0 million bbl stock draw.
The stock draw includes at 212,000 bpd crude stock decline at the Cushing, Oklahoma, supply hub that serves as the delivery point for the NYMEX WTI futures contract. The market expected a 300,000 bbl build in crude stocks at Cushing.
EIA showed a 363,000 bbl gasoline stock draw versus an expected 500,000 bbl decline, while distillate stocks increased 2.6 million bbl that was more than five times an expected build of 500,000 bbl.
Late Tuesday, the American Petroleum Institute reported a 1.9 million bbl for crude stocks and a 4.3 million bbl stock build for distillates.
EIA’s preliminary data on demand for last week was disappointing however, showing a drop of 411,000 bpd for gasoline to 9.339 million bpd and a 376,000 bpd decline for distillates to 3.628 million bpd.
Despite the crude stock draw, the oil market remains oversupplied and the weak data on demand is likely to curb the upside for oil futures.
Traders now await the Federal Open Market Committee’s policy statement due out this afternoon after a two-day meeting. It’s expected to provide a hint on the timing of the first federal funds rate hike in nearly a decade that could affect the dollar’s value in index trading. Domestic oil prices and the dollar often trade inverse to each other.
George Orwel can be reached at email@example.com
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