OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled higher for a second day Wednesday. This came following the midmorning release of supply data from the Energy Information Administration that showed a sizeable decline in commercial crude inventories and stock draws for gasoline and distillate fuel for the week-ended July 20.
"Crude and products are supported by across the board inventory declines as well as near record gasoline demand as the public takes to the roads this summer," said Andy Lipow, president of Houston-based Lipow Oil Associates.
EIA reported commercial crude stocks were drawn down 6.1 million bbl to 404.9 million bbl during the week reviewed, down 16.2% from a year ago, with inventory at its lowest point since February 2015. Gasoline supply declined 2.3 million bbl to 233.5 million bbl, with distillate stocks 101,000 bbl lower for the week profiled at 121.2 million bbl.
"The industry is continuing to watch inventory declines at Cushing which are approaching minimum operating levels, which is supporting the backwardation that were seeing in the (WTI) futures contract, giving further incentives to the industry to liquidate inventories," said Lipow.
Crude stocks at Cushing, Oklahoma, the delivery point for the NYMEX West Texas Intermediate contract, fell for a tenth straight week through July 20, down 1.127 million bbl to a 23.7 million bbl three-year, nine-month low. Stocks at Cushing are at 30.3% of working capacity.
NYMEX September WTI futures settled 78 cents bbl higher at $69.30, with ICE September Brent crude futures up 49 cents to $73.93 bbl. NYMEX August RBOB gasoline futures rose 2.75 cents to settle at $2.1231 gallon, and the August ULSD contract gained 1.86 cents gallon to $2.1512 at settlement. Both products contracts settled at two-week highs.
EIA reported gasoline demand up 138,000 bpd at 9.846 million bpd during the week reviewed, the fourth highest weekly rate in 2018. Gasoline demand set a weekly record high in early June at 9.879 million bpd. Demand for distillates edged up 26,000 bpd to a 4.167 million bpd six-week high.
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