Oil Futures Add to Early Gains
NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures added to their early gains during midmorning trade Wednesday after a U.S. government oil report for the week-ended Sept. 8 released at 10:30 AM ET showed the severe impact to fuel supply caused by Hurricane Harvey that struck the Texas Gulf Coast more than two weeks ago.
The Energy Information Administration's Weekly Petroleum Status Report showed U.S. commercial crude oil stockpiles increased by 5.9 million bbl in the week-ended Sept. 8, the second straight weekly crude stock build since mid-June. At the current level of 468.2 million, total U.S. crude supply is 2.5% below inventory on hand during the same week in 2016.
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EIA also reported crude oil production jumped 572,000 bpd to 9.354 million bpd during the week reviewed, while up 860,000 bpd versus a year ago. This also shows the quick recovery in offshore production activity and onshore production at Eagle Ford after the hurricane.
The report showed stock draws of 8.4 million bbl for gasoline and 3.2 million bbl for distillates for the week, beating market estimates for stock draws of 3.0 million bbl each for gasoline and distillates. Suggesting the severe impact of Harvey on Gulf refining runs, this report shows the biggest one-week gasoline stock draw in a quarter century, and at 218.3 million bbl total gasoline supply is at the lowest level since late 2015.
"This week's [report] obviously was still heavily influenced by the storms as will next week's report, and thus, no long term analysis will be effected, other than the refinery capacity note, will be altered the next couple of weeks," said analyst Kyle Cooper at ION Energy in Houston.
Earlier, the oil market gained after the International Energy Agency raised its global oil demand forecast and reported a supply decline in August globally and by the Organization of the Petroleum Exporting Countries. The bullish IEA report continues to support the oil futures complex, especially Brent.
At 11:15 AM ET, NYMEX October West Texas Intermediate crude rose 70cts to $48.93 bbl, near a $48.96 three-day high. November Brent crude on the IntercontinentalExchange gained 53cts to $54.80 bbl, after trading to $54.84, the highest level since April 19.
NYMEX October ULSD futures advanced 2.11cts to $1.7617 gallon, off a three-day high of $1.7627. October RBOB futures were up 0.49cts to $1.6612 gallon.
George Orwel can be reached at george.orwel@dtn.com
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