Oil Futures Plunge, WTI nears $37 Bbl on Large Crude Build

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Crude and refined product futures on the New York Mercantile Exchange accelerated losses in post-inventory trade Wednesday after government data reported U.S. commercial crude supplies increased more than expected during the week ended Oct. 23 amid a weekly surge in domestic production while implied gasoline demand lost ground in a year-on-year comparison despite a weekly increase.

In early afternoon trade, December West Texas Intermediate futures plummeted more than $2 to trade just above $37 barrel (bbl) after U.S. Energy Information Administration data reported commercial crude oil supplies spiked 4.3 million bbl last week, well above market expectations for a 900,000 bbl increase. The build came despite greater export demand and increased refinery inputs, with domestic production surging a whopping 1.2 million barrels per day (bpd) to a 3-month high 11.1 million bpd as offshore operators in the Gulf of Mexico brought back output shut-in by Hurricane Sally.

EIA showed gasoline stocks declined a less-than-expected 892,000 bbl during the week profiled, while an 256,000 bpd increase in implied demand from a more than 4-month low to 8.545 million bpd was dwarfed by a year-on-year comparison when gasoline supplied to the U.S. market during the comparable week in 2019 was 9.784 million bpd.

Distillate stocks decreased 4.5 million bbl from the previous week to 156.2 million bbl and distillate fuel supplied to the U.S. market increased a sharp 653,000 bpd to 4.24 million bpd during the week ended Oct. 23. While a big gain, the implied demand figure is calculated, with production at a fresh, more-than-38-month low 4.126 million bpd.

NYMEX RBOB November futures declined nearly 7 cents to $1.0740 gallon, with ULSD November futures slumping nearly 5 cents to $1.1090 gallon.

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

Liubov Georges