Oil Futures Rally in Midday Trade

CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest to delivery rallied in response to a bullish series of statistics released midmorning by the Energy Information Administration showing large across the board inventory drawdowns and a shrinking year-on-year surplus for the week ended March 15.

EIA reported a steep 9.6 million barrel (bbl) draw in U.S. commercial crude stocks to a nine-week low at 439.5 million bbl, with a year-on-year supply surplus now at 11.2 million bbl or 2.6%, down 22.827 million bbl or 67% over the past four weeks.

Nearly 6 million bbl of the decline can be attributed to an 846,000 barrels per day (bpd) jump in U.S. crude exports to 3.392 million bpd, while a 196,000 bpd increase in refinery crude inputs to a 16.198 million bpd six-week high erased a 100,000 bpd increase in domestic crude production which returned to a 12.1 million bpd record high during the week profiled.

Total commercial crude and products stocks in the United States were drawn down 12.6 million bbl or 1% to a 1.2219 billion bbl 6-1/2 month low last week. Total U.S. commercial oil stocks have declined 45.21 million bbl or 3.6% since mid-January when they reached a 15-month high.

Gasoline stocks were drawn down for the fifth week through March 15 EIA data shows, down a more-than-expected 4.6 million bbl to an 11-week low at 241.5 million bbl. Gasoline inventory is down 18.115 million bbl or 7% from a record high reached in mid-January.

EIA reported a 4.1 million bbl decline in distillate fuel inventory for the week profiled to a 132.2 million bbl 11-week low, with stocks up 1.2 million bbl against year prior. The larger-than-expected draw was sparked by a 752,000 bpd jump in implied demand to a 4.706 million bpd three-month high.

Total oil products supplied to the primary market in 2019 through March 15 averaged 20.86 million bpd, up 260,000 bpd or 1.3% against the comparable year-ago period.

In late morning trade, Nymex April West Texas Intermediate futures surged to a $59.99 bbl four-month high on the spot continuous chart ahead of expiration this afternoon, with the May contract reaching a $60.18 bbl high. May Brent futures on the Intercontinental Exchange rallied to a new four-month spot high at $68.52 bbl, up about $0.80 at $68.40 bbl late morning.

Nymex April RBOB futures traded at a fresh better-than five-month high on the spot continuous chart at $2.0131 gallon, trading about 30 points below the high late morning. April ULSD futures jumped to a $2.0131 one-week high for a more than 2 cents gain.

Brian L. Milne can be reached at brian.milne@dtn.com