WTI Futures Gain on Large Crude Draw, Demand Strengthens

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Crude and refined products futures on the New York Mercantile Exchange moved higher in post-inventory trade Wednesday after government data from the Energy Information Administration (EIA) showed U.S. commercial crude oil inventories declined more than expected during the week ended June 11 as demand for refined fuels picked up and refinery runs jumped to the highest utilization rate in 18 months.

Government data showed U.S. commercial crude supplies dropped 7.4 million barrels (bbl) from the previous week to 466.7 million bbl, about 5% below the five-year average. This compares with 2.9 million bbl draw expected by the analysts and 8.537 million bbl decline reported earlier this week by the American Petroleum Institute. Oil stored at Cushing, the delivery point for the West Texas Intermediate futures contract, declined 2.15 million bbl from the previous week to 43.554 million bbl. Domestic refiners processed 16.337 million barrels per day (bpd) of crude oil last week, hiking the utilization rate 1.3% from the first week of June to 92.6% of capacity -- the highest run rate since the first week of January 2020.

U.S. crude oil production rose 200,000 bpd from the previous week to 11.2 million bpd, according to the EIA.

U.S. gasoline stocks gained 2 million bbl from the previous week to 243 million bbl compared with analyst expectations for inventories to have fallen by 800,000 bbl from the previous week. Demand for motor gasoline reversed higher to above 9 million bpd at 9.36 million bpd, up 880,000 bpd from the previous week, easing some concern over summer driving demand.

Distillate stocks fell by 1 million bbl to 136.2 million bbl and are now about 6% below the five-year average, according to government data. Earlier in the week, analysts expected distillate supplies would rise by 100,000 bbl from the previous week. Distillate supplied to the U.S. market, a measure for demand, surged 923,000 bpd to 4.336 million bpd.

Shortly after 11 a.m. EDT, NYMEX WTI July futures traded $0.50 higher near $72.65 bbl, and August Brent crude on the Intercontinental Exchange added $0.70 to $74.70 bbl. NYMEX RBOB July futures reversed higher, up 0.85 cents at $2.1790 gallon, and front-month ULSD traded 0.75 cents higher near $2.12 gallon.

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

Liubov Georges