CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest to delivery and the spot-month Brent contract on the Intercontinental Exchange settled mostly higher Friday while down on the week although off multi-week lows plumbed Wednesday and Thursday.
An early session advance for oil futures was spurred by short covering ahead of the weekend and a planned strike in the North Sea at Total's offshore platforms. Easing concern over a widening rift between the United States and China amid their trade dispute that sparked a rally in equities Thursday also buoyed oil futures in early trading.
The driving factor in this week's losses was the midweek release of a bearish slate of supply data from the Energy Information Administration that triggered a selloff that dropped the contracts to multi-week lows.
EIA reported an unexpected and large 6.8 million-barrel (bbl) build in U.S. commercial crude stocks occurred during the week-ended Aug. 10 that lifted inventory to 414.2 million bbl, and above the five-year average for the first time since early June. The sharp crude build was joined by a larger-than-expected increase in distillate stocks that, while welcomed because of low inventory, helped to boost total crude and oil products inventories 17.4 million bbl, and above the five-year average for the first time since early April.
Traders indicate they doubt the 1.083 million-barrel-per-day (bpd) jump in U.S. crude imports to 9.014 million bpd -- the third highest import rate of 2018, which was the key driver in pushing up inventory, expecting a revision.
The sharp crude build also ran contrary to weekly domestic demand statistics, which showed crude refiner inputs at a near record high at 17.981 million bpd during the week profiled while runs jumped 1.5% to a 98.1% utilization rate, the highest run rate in 20 years.
The large jump in total U.S. commercial inventory also prompted focus on slowing demand for distillate fuels and gasoline, with their four-week averages down against year ago. EIA shows implied gasoline demand down 100,000 bpd at 9.646 million bpd during the four weeks ended Aug. 10 compared with the 2017 pace, while distillate fuel supplied to market at 3.935 million bpd was 377,000 bpd, or 8.7%, below the comparable year-ago period.
Also weighing on West Texas Intermediate futures this week was a strong U.S. dollar which reached a 13-month high midweek against a basket of currencies in index trading. As the dollar surged, Turkey's currency devaluation, while steadying this week, continues to worry producers as the U.S., Turkey trade dispute escalated, raising contagion fears that could slow economic growth and cut into oil demand. Currency worries spread to other emerging economies with dollar exposure, with oil demand growth forecasts predicated on their strong consumption.
NYMEX September WTI futures settled up $0.45 at $65.91 bbl while down $1.72 on the week, trading at a $64.43 bbl two-month spot low Thursday. ICE October Brent crude settled $0.40 higher at $71.83 bbl while down $0.98 on the week, trading at a $70.30 better-than four-month low on the spot continuous chart Wednesday.
NYMEX September ULSD futures eked out a 0.18-cent gain with a $2.0982 gallon settlement, although fell 4.15 cents from prior Friday, trading at a four-week spot low of $2.0760 on Wednesday. NYMEX September RBOB futures ended the day down 0.65 cent at $1.9809 gallon, up from Thursday's better-than-four-month spot low of $1.9671 traded Thursday, while down 5.83 cents, or 2.9%, on the week.
Brian L. Milne can be reached at email@example.com
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