Oil Plummets on Bearish EIA Report

OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange fell sharply ahead of settlement Wednesday, amid bearish supply data from the Energy Information Administration and growing trader uncertainty over a developing trade war with China.

EIA reported U.S. crude inventories fell by 1.4 million bbl to 407.4 million bbl during the week-ended Aug. 3. The decline was below analyst expectations for a 3.3 million bbl draw and far lower than the 6.0 million bbl drop reported by the American Petroleum Institute Tuesday afternoon.

In reaction to the bearish EIA data, West Texas Intermediate crude for September delivery dropped $2.23 to $66.94 bbl, finishing at its lowest settlement on the spot continuous chart since June 20, while Brent crude slumped $2.37 bbl to $72.28 bbl, its lowest on the chart in more than three weeks. RBOB futures for September delivery slumped 8.45 cents to $2.0195 gallon, its lowest settlement since July 16, while September ULSD sunk 5.34 cents to $2.1157 gallon, its lowest settlement in nearly a week.

EIA data showed Cushing supplies fell a 12th consecutive week, shedding 590,000 bbl to 21.803 million bbl. Stocks at Cushing are the lowest since November 2014.

Gasoline stocks increased for the first time in six weeks, EIA said, rising 2.9 million bbl to 233.9 million bbl, while distillate stocks increased a larger-than-expected 1.2 million bbl to 125.4 million bbl.

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