Oil Gains as EIA Shows Demand Up

NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved higher in midmorning trade after the Energy Information Administration issued weekly data showing a draw from domestic crude oil inventory while refined products stocks were mixed joined by sharp increases in implied demand for gasoline and distillate fuel.

At 9:55 a.m. CDT, NYMEX November West Texas Intermediate crude futures rose 57 cents to $46.93 barrel, off a four-day spot high of $47.15. The ICE November Brent crude oil futures contract rallied 90 cents to $49.98 bbl, off a one-week high of $50.25.

In products trade, NYMEX October ULSD advanced 3.55 cents to $1.5675 gallon, moving off a better than one-week high of $1.5780. NYMEX October RBOB futures gained 3.16 cents to $1.4480 gallon, off a three-week high of $1.4531.

EIA’s Weekly Petroleum Status Report for the week-ended Sept. 18 released midmorning was somewhat bullish, showing crude stocks fell 1.93 million bbl versus an expected 2.2 million bbl decline the market expected while the American Petroleum Institute late Tuesday reported a 3.7 million bbl crude stock draw.

Crude stocks at the Cushing, Oklahoma, supply hub that serves as the delivery point for NYMEX WTI futures fell 462,000 bbl, nearly matching an expected 500,000 bbl draw. Crude imports fell 13,000 barrel per day for the week.

EIA’s products data showed gasoline stocks up 1.369 million bbl versus a 700,000 bbl draw the market expected but lower than API’s data showing a 2.2 million bbl increase.

Distillate stocks were unexpectedly drawn down 2.09 million bbl last week versus forecast showing a 1.0 million bbl increase while API reported stocks unchanged at the prior week’s level.

Demand for gasoline rose 232,000 bpd for the week while distillate stocks climbed 840,000 bpd, possibly boosted by heating oil pre-buying ahead of the heating season in the Northern Hemisphere.

However, oil futures’ upside was limited by China’s weak economic data that threatened to curb demand and a stronger dollar that limits market liquidity.

George Orwel can be reached at george.orwel@dtn.com