WTI, ULSD Futures Trim Losses as Stocks Fall, Output Down

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Nearby delivery West Texas Intermediate and ULSD futures on the New York Mercantile Exchange trimmed losses in early afternoon trade Thursday after government data from the Energy Information Administration reported across-the-board draws in U.S. crude and refined product supplies during the week ended Oct. 9. The October RBOB contract came under selling pressure as demand for motor gasoline fell sharply from the previous week.

Near 12:15 p.m. EDT, WTI futures for November delivery traded 88 cents lower at $40.17 barrel (bbl). October ULSD futures were down about 2 cents to $1.1710 gallon and the October RBOB contract plummeted 3.41 cents to $1.1633 gallon.

U.S. gasoline demand tumbled 320,000 barrels per day (bpd) during the week ended Oct. 9 to 8.576 million bpd, giving up some of the gains made in the week prior. Against the 5-year average, demand for motor gasoline continues to trend some 9% lower, showing little improvement over the past four weeks. Gasoline stockpiles were drawn down for the ninth week out of the past 10 weeks however, falling 1.6 million bbl after a 1.5 million bbl draw prior week. At 225.100 million bbl, commercial gasoline stockpiles slipped into deficit against the 5-year average.

Offsetting the bearish reading on gasoline demand, distillate fuel consumption recouped 307,000 bpd from the previous week to 4.175 million bpd and distillate stockpiles plunged a more-than-expected 7.2 million bbl. At 164.6 million bbl, distillate supplies in the United States are still 18% above the 5-year average.

Over the past four weeks, distillate fuel suppled to the U.S. market averaged 3.9 million bpd, down by about 3.7% from the same period last year, although a marked improvement from the 9.3% decline reported last week.

Domestic refiners once again reduced their crude throughputs, down 277,000 bpd. Refiners operated at 75.1% of their operable capacity.

Domestic production fell 500,000 bpd from the previous week to 10.5 million bpd, according to the EIA, due in part to offshore production shut-ins in the Gulf of Mexico caused by Hurricane Delta.

Commercial crude oil stocks declined a less-than-expected 3.8 million bbl to 489.1 million bbl, about 11% above the 5-year average.

Total commercial petroleum inventories decreased by 16.8 million bbl last week.

Liubov Georges can be reached at liubov.georges@dtn.com

Liubov Georges