Oil Surges on Bullish Crude Data

OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange continued higher in midmorning trade. This came after the release of weekly data from the Energy Information Administration confirmed an unexpectedly-large decline in commercial crude oil supplies, while gasoline stocks increased as expected and distillate inventories were unchanged for the week ended June 22.

Rallying futures come after EIA said commercial crude oil inventories dropped 9.9 million bbl for the week ended June 22 to 416.6 million bbl, which follows the previous week's 5.9 million bbl draw. Current supplies are 18.2% less than during the equivalent week in 2017. Tuesday's American Petroleum Institute weekly supply report showed for a 9.228 million bpd decline.

U.S. crude exports spiked 626,000 bpd to 3.0 million bpd, a record high.

At last look, NYMEX August West Texas Intermediate crude futures stood $2.18 higher on the day at $72.71 bbl, gaining 86 cents bbl since the report's release. ICE August Brent crude futures, which expire Friday, stood at $77.96 bbl, while the September contract traded at $77.79 bbl. The Friday-expiring NYMEX July RBOB futures contract rose 5.53 cents to $2.0959, up a little over 2.0 cents gallon since the EIA report release, while the August contract stood at $2.1154 gallon at last look, 5.87 cents gallon higher on the day.

July ULSD rose 5.51 cents gallon to 2.1841 gallon, up 2.18 cents gallon since the release of EIA data and ahead of expiration on Friday, while the August ULSD contract rallied 5.5 cents to 2.1875 gallon.

The draw in crude supplies reflected another weekly increase in U.S. refinery utilization to 97.5% of capacity, up from the previous week's 96.7% run rate, as refiners ramp up gasoline production with summer driving in full swing. EIA data shows refiners increased weekly crude oil inputs 115,000 bpd to 17.816 million bpd, an all-time high.

EIA reported gasoline stocks rose 1.2 million bbl to 241.2 million bbl, the third weekly build, with inventory at a three-month high. Implied gasoline demand rose 405,000 bpd for the week ended June 22 to 9.731 million bpd.

Brian Whary can be reached at brian.whary@dtn.com