WASHINGTON, D.C. (DTN) -- Reversing earlier losses, nearby delivery month oil futures on the New York Mercantile Exchange advanced early afternoon Thursday in reaction to government data from the Energy Information Administration showing a larger-than-expected drop in nationwide crude and gasoline inventories during the week leading up to the July Fourth holiday weekend, with gasoline demand surging above 10 million bpd amid peak summer travel.
Near 12:30 p.m. ET, NYMEX August RBOB futures gained more than 3 cents to trade at $2.2393 gallon after inventory report showed gasoline supplies fell by 6.1 million barrels (bbl) last week, contrasting with expectations for inventories to fall by 2.1 million bbl. At 235.5 million bbl, nationwide gasoline supplies stand about 2% below the five-year average.
A larger-than-expected draw came as demand for the transportation fuel jumped 9% from the previous week to 10.043 million barrels per day (bpd), with U.S. motorists taking to the roads in ushering in July. Gasoline supplied to the U.S. market, a measure of demand, held above 9 million bpd for each but one week since May 14.
Government data also showed commercial crude oil stockpiles once again fell more than expected, tumbling 6.9 million bbl last week to about 7% below the five-year average 445.5 million bbl. Nationwide crude stockpiles have maintained a destocking pattern since the week ended May 21, plunging over 30 million bbl since the full reopening of the economy. Oil stored at Cushing, the delivery point for West Texas Intermediate, fell by 614,000 bbl from the previous week to below 40 million bbl.
Offsetting gains for the oil complex, domestic refineries processed 184,000 bpd less crude last week at 16.115 million bpd. The refining utilization rate fell 0.7% from the previous week to 92.2% compared with analyst calls for a 0.4% increase.
U.S. crude oil production rose 200,000 bpd from the previous week to 11.3 million bpd, according to the EIA.
Distillate inventories rose by 1.6 million bbl to 138.7 million bbl and are now about 6% below the five-year average. Earlier in the week, analysts estimated distillate supplies would rise by 300,000 bbl.
Following the data release, NYMEX August ULSD futures advanced 1.83 cents to near $2.1067 gallon, and the front-month WTI added $0.39 to trade above $72 bbl.
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