NYMEX Oil Futures Rally on EIA Data

By George Orwel
DTN Refined Fuels Editor

NEW YORK (DTN) -- New York Mercantile Exchange oil futures rallied after the Energy Information Administration reported another larger-than-expected build in crude oil inventories, product stock draws and big increases in petroleum demand for the week-ended Oct. 23.

The EIA’s data, released at 10:30 AM ET, was considered bullish on products, as it showed a bigger-than-expected stock draw for distillates, with the decline in gasoline stocks only slightly missing market estimates. Implied demand for both gasoline and distillates increased.

Crude inputs into refineries, a proxy for crude demand, was also higher for the second straight week, as refineries returning from fall maintenance ramp up operations.

The market was already higher even before the EIA issued its report, with West Texas Intermediate and ULSD futures rebounding from two-month lows, boosted by technical support and a weakening dollar ahead of the U.S. Federal Reserve’s monetary policy statement due out at 2:00 PM ET. The Fed is expected to delay raising interest rates.

At 10:45 AM ET, NYMEX December WTI futures jumped $2.22 or 5.1% to $45.42 bbl, off a three-day high of $45.63. The ICE December Brent futures contract rallied $1.96 or 4.2% to $48.77 bbl, off a one-week high of $48.95.

NYMEX November ULSD futures spiked 5.89cts or 4.1% to $1.4833 gallon, off a three-day high of $48.61. NYMEX November RBOB futures soared 6.16cts or 4.8% to $1.3488 gallon, off a near two-week high of $1.3522, with the November products contracts set to expire on Friday.

Analysts said the oil market was higher initially because bullish investors felt WTI was ready for a rebound after drifting down to a two-month low on Tuesday. If the Fed decides to delay rates because of a mixed economic picture, then that will help the oil futures complex, the analysts added.

The EIA report today detailed a 3.3 million bbl crude stock build for the week-ended Oct. 23, surpassing an expected build of 2.0 million bbl but short of the 4.1 million bbl build reported late Tuesday by the American Petroleum Institute.

EIA also reported a 1.1 million bbl stock draw for gasoline, falling short of an expected 1.3 million bbl draw but more than the API’s 700,000 bbl decline.

On distillates, EIA reported a 3.0 million bbl stock draw, more than both the API’s 2.6 million bbl draw and expectations for a 2.2 million bbl decline.

On the demand side of the ledger, EIA reported a 271,000 bpd weekly increase in crude inputs, an 186,000 bpd rise for gasoline and a 442,000 bpd gain for distillates.

(BAS)

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