Oil Futures Push Higher on EIA Data

CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures closest to delivery added to early gains late morning Wednesday in reaction to a bullish set of statistics released midmorning by the Energy Information Administration showing across the board drawdowns in U.S. oil inventory and a jump in demand for the week-ended Aug. 24.

U.S. commercial crude supply was drawn down 2.6 million bbl last week, well above market estimates for a draw between 500,000 and 700,000 bbl and contrasted with a modest 38,000 build reported late Tuesday by the American Petroleum Institute. Crude stocks totaled 405.8 million bbl, 52.0 million bbl or 11.4% below the year-ago stock level, and slipped under the five-year average after matching the average week prior.

EIA also reported a 1.5 million bbl draw in gasoline that ran contrary to market estimates that a build between 200,000 and 400,000 bbl took place last week while API reported a 21,000 bbl increase. Distillate fuel inventory declined 800,000 bbl during the week profiled following five consecutive weekly increases, with the API reporting a 982,000 bbl build for the week and market consensus eyeing a build between 1.4 and 1.5 million bbl.

Implied gasoline demand surged 446,000 bpd to 9.899 million bpd during the week profiled, the highest weekly demand rate on record, with gasoline supplied to the primary market this year through Aug. 24 up 111,000 bpd or 1.2% against the comparable year-ago period at 9.377 million bpd.

Implied demand for distillate fuel also jumped, up 372,000 bpd to a 4.437 million bpd four-month high. The sharp increase in distillate fuel supplied to market was realized despite a 129,000 bpd rise in imports to a 274,000 bpd 7-1/2 month high.

Implied demand for total U.S. oil products surged 595,000 bpd to a 14-month high at 22.137 million bpd. In 2018 through Aug. 24, total demand for U.S. oil products are up 505,000 bpd or 2.5% against year prior at 20.650 million bpd.

At last look, NYMEX September ULSD futures were up 1.5 cents near $2.2260 gallon, edging off a $2.2351 fresh 3-1/2 month high on the spot continuous chart, with October ULSD at a roughly 0.6 cents premium to the September contract.

NYMEX September RBOB futures were up about 0.55 cents at $2.0844 gallon, paring an advance to a $2.0939 intraday high, while October delivery continued to trade at a more than 10.0 cents discount to the September contract.

NYMEX September ULSD and RBOB futures expire Friday afternoon. NYMEX October West Texas Intermediate futures were up $0.75 at $69.28 bbl, and near a fresh three-week spot high of $69.55 bbl.

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