Oil Pares Gains Despite EIA Showing Large Inventory Draws

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange trimmed morning gains following inventory data from the U.S. Energy Information Administration showing total crude oil and product stocks in the United States declined by a combined 14 million barrels (bbl) during the week ended Oct. 13 as demand for refined fuels improved modestly heading into the second half of the month.

Further details of EIA's report show commercial oil stocks decreased 4.5 million bbl in the reviewed week to 419.7 million bbl, some 5% below the seasonal five-year average. The outsized draw countered market expectations for a 400,000-bbl increase and was more in line with a 4.383-million-bbl build reported by the American Petroleum Institute.

Oil stored at the Cushing, Oklahoma, tank farm, the delivery point for West Texas Intermediate, fell 758,000 bbl from the previous week to 21 million bbl.

U.S. crude oil production remained unchanged at a record high 13.2 million barrels per day (bpd), topping the previous weekly high of 13.1 million bpd set during the week ended March 13, 2020.

The refinery run rate increased by a larger-than-expected 0.4% from the previous week to 86.1% of capacity compared with expectations for a 0.1% decrease.

Domestic refiners processed 15.4 million bpd in the reviewed week, some 192,000 bpd higher compared to the prior week average.

In the gasoline complex, commercial stockpiles fell 2.4 million bbl to 223.3 million bbl compared with analyst expectations of a 600,000-bbl increase.

Demand for gasoline improved for the second consecutive week through Oct. 13, averaging 8.943 million bpd after plunging to a 25-year-low 8 million bpd at the start of the month. Over the past four weeks, gasoline supplied to the U.S. market averaged 8.5 million bpd, down 3.1% from the same period last year.

Distillate inventory decreased 3.2 million bbl from the previous week to 113.8 million bbl and now stands about 12% below the seasonal five-year average.

Demand for middle distillates increased 746,000 bpd in the reviewed week to 4.416 million bpd. Total products supplied over the last four-week period averaged 20.2 million bpd, down 0.9% from the same period last year.

Near the noon hour in New York, November WTI futures were $1.40 higher to just above $88 bbl, and November ULSD futures declined about $0.0490 to near $3.1275 gallon. November RBOB futures rallied $0.0520 to $2.3365 gallon.

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

Liubov Georges