RBOB Surges as Stocks Fall More Than Expected, Demand Gains

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Crude and refined products futures on the New York Mercantile Exchange drifted higher in post-inventory trade Wednesday, with the September RBOB contact surging 2.5% after government data from Energy Information Administration reported gasoline inventories fell to the lowest stock level since November 2020 last week as demand for the motor transportation fuel pushed higher and refiners increased run rates for the fourth consecutive week.

Lending further support for the oil complex, U.S. commercial crude oil inventories declined 3 million barrels (bbl) from the previous week to 432.6 million bbl, about 6% below the five-year average, according to EIA data released at midmorning. Earlier in the week, analysts expected crude stockpiles would fall by 2.4 million bbl and preliminary data from the American Petroleum Institute showed a smaller 1.622 million bbl drawdown. EIA data also detailed crude oil stocks at the Cushing, Oklahoma, hub -- the underlying delivery point for West Texas Intermediate futures -- rose slightly to 33.7 million bbl. The larger-than-expected crude draw came as domestic production remained unchanged near a 15-month high 11.4 million barrels per day (bpd) and refinery run rates jumped to the highest level of utilization since the week ended June 25 at 92.4%. Domestic refiners processed 16.072 million bpd of crude oil last week.

Gasoline stockpiles declined 2.2 million bbl from the previous week to 225.9 million bbl compared with analyst expectations for inventories to decrease by 1.4 million bbl.

Demand for gasoline pushed higher to 9.572 million bpd last week after stalling near 9.3 million bpd during the previous two weeks. The final push for summer travel joined with reopening of schools and universities across the country could have contributed to last week's gains in implied gasoline consumption.

The bearish part of the report were distillates, with stockpiles gaining 644,992 bbl from the previous week to 138.5 million bbl and demand for middle of the barrel fuel falling to 4.104 million bpd. Total commercial petroleum inventories decreased by 4.8 million bbl last week, while total products supplied to the U.S. market over the last four-week period averaged 21 million bpd, up 13.4% from the comparable period last year.

Late morning, NYMEX October WTI futures edged $0.30 higher to trade at $67.85 bbl, and the international Brent crude benchmark for October delivery advanced $0.60 to near $71.65 bbl. NYMEX September RBOB futures rallied 6.2 cents to 2.2428 gallon, and NYMEX September ULSD contract moved up 2.767 cents to $2.0935 gallon.

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

Liubov Georges