WTI Futures Bolster Gains After EIA Shows Large Crude Draw

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange extended higher in post-inventory trade Wednesday after federal data from U.S. Energy Information Administration reported total commercial crude supplies decreased during the week ended Oct. 30 amid a sharp drop in domestic crude production and higher refinery run rates.

In late morning trade, NYMEX December West Texas Intermediate futures traded $1.16 higher at $38.80 barrel (bbl) and the December ULSD futures surged 3.88 cents or more than 3.5% to $1.1656 gallon. NYMEX December RBOB contract advanced 2.64 cents to trade near a 1-week spot high $1.1049 gallon.

EIA's inventory snapshot for the week ended Oct. 30 was bullish for crude oil, detailing a large 8 million bbl draw in U.S. commercial crude supplies, although bearish for products with a 1.6 million bbl drop in distillate stockpiles less than expected while gasoline stocks increased against a consensus for a decline. At 484.4 million bbl however, crude stockpiles are still 8.4% above last year.

Moreover, the large draw was realized amid a 600,000 barrel per day (bpd) decline in domestic production to 10.5 million bpd as operators in the Gulf of Mexico shut-in offshore wells.

U.S. refiners did increase crude throughputs by 164,000 bpd from the previous week to 13.552 million bpd, with the run rate up at 75.3% of the capacity.

Increased refinery output was met by lower implied demand, leading to an unexpected 1.5 million bbl build in gasoline stocks to 227.7 million bbl, 4.8% above year ago. Gasoline supplied to the U.S. market declined 209,000 bpd from the previous week to 8.336 million bpd, widening its year-on-year deficit to 8.8% from the previous week.

Demand for distillate fuels also declined from the previous week to 3.762 million bpd, down 478,000 bpd.

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

Liubov Georges