WASHINGTON (DTN) -- Nearby delivery month oil futures on the New York Mercantile Exchange added to gains in early afternoon trade Wednesday after weekly supply data from the U.S. Energy Information Administration showed domestic crude oil supplies decreased a third consecutive week and demand for refined products reversed higher during the week ended Aug. 7, bolstering hopes for ongoing recovery in domestic fuel consumption.
This week's inventory report was bullish for the oil complex. Total commercial petroleum inventories dropped 6.2 million barrels (bbl) during the week reviewed, with 4.5 million bbl of that decrease occurring in crude oil stocks alone. After declining for three straight weeks, U.S. crude oil stocks now stand at 514.1 million bbl, a fresh 17-week low, but still about 15% above the 5-year average. Analysts mostly anticipated a more tepid draw of 2.9 million bbl.
The larger-than-expected drawdown was realized as refinery run rates jumped 1.4% from the week prior to 81%, the highest since the final week of March. U.S. crude oil exports increased 324,000 barrels per day (bpd) from the previous week to 3.143 million bpd, while imports declined 389,000 bpd to average 5.6 million bpd.
Domestic production dropped 300,000 bpd to 10.7 million bpd in the week profiled, the lowest level since the week ended June 12 and only the second time this year below 11 million bpd.
At the key Cushing supply depot in Oklahoma, the delivery location for the New York Mercantile Exchange West Texas Intermediate futures contract, inventory posted a sixth consecutive weekly gain, up 1.336 million bbl to 53.289 million bbl, an 11-week high.
In refined products, the data revealed gasoline supplies declined 722,000 bbl to 247.1 million bbl, still some 8% above the 5-year average. That follows two weeks of back-to-back builds.
Demand for motor gasoline was up 266,000 bpd or 3.1% to 8.883 million bpd, the highest level since the week ended March 13. EIA reported implied distillate demand continued higher, up 162,000 bpd or 4.4% to 3.862 million bpd, the highest level since the final week of March.
Near 12:15 p.m. EDT, NYMEX September West Texas Intermediate crude futures advanced 80 cents to $42.40 bbl and front-month ULSD futures traded up 1.31 cents to $1.2516 gallon while NYMEX RBOB September futures surged 3.69 cents or 3% to $1.2413 gallon.
Liubov Georges can be reached at liubov.georges@dtn
© (c) Copyright 2020 DTN, LLC. All rights reserved.