WTI Futures Shrug as EIA confirms Large Crude Stock Build
10/17 11:52 AM
WTI Futures Shrug as EIA confirms Large Crude Stock Build WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange spot month oil futures moved fractionally lower midday Thursday, despite federal data showing a large 9.3 million bbl build occurred in U.S. crude stocks during the week-ended Oct. 11, with losses limited by larger-than-expected draws in both gasoline and distillate supply amid lower refinery run rates. At 12:30 PM ET, NYMEX November West Texas Intermediate futures were down $0.36 near $53 bbl, and the Intercontinental Exchange December Brent contract traded lower $0.61 at $58.81 bbl. NYMEX November ULSD futures were down 2.23cts to $1.9203 gallon and the November RBOB contract dropped 2.27cts to $1.6021 gallon. U.S. Energy Information Administration reported midmorning total motor gasoline inventories fell for a third straight week as of Oct. 11, down 2.6 million bbl to the lowest level since mid-May. At 226.2 million bbl gasoline inventories are about 3.4% lower than the corresponding week a year ago, while production registered a 4.1% year-on-year drop. The data was also bullish for distillates, showing a second weekly decline in distillate supply last week, down 3.8 million bbl to the lowest level since December 2018. Distillate stocks are currently 7% below than the corresponding week a year ago and about 11% down from the five-year average. Implied demand for distillates also jumped 330,000 bpd during the week-ended Oct. 11, which is 15.1% above the same week in 2018. Federal data once again detailed a steep drop in the U.S. refinery run rate last week amid continued seasonal maintenance programs, leading to lower product production. Domestic refineries operated at 83.1% of their capacity last week, down 2.6% from a week prior. According to the data, crude output remained at a record-high level of 12.6 million bpd for the second straight week, contributing to the large buildup in domestic oil inventories during the week reviewed. U.S. crude supply increased 9.3 million bpd as of Oct. 11, lifting inventories to about 2% above the five-year average for this time of the year. Crude from the Strategic Petroleum Reserve was drawn down for the second week, down 1.3 million bbl. The market's muted reaction to the large build comes on the heels of an API reported 10.5 million bbl increase in commercial crude supplies reported late Wednesday, suggesting the weekly increase---the second largest of 2019---has been priced into the market. Agency said U.S. crude oil imports averaged 6.3 million bpd during the week-ended Oct. 11, 70,000 bpd more than the previous week. However, over the last four weeks crude oil imports averaged about 6.3 million bpd, 18.2% less than the same four weeks in 2018. The data showed crude oil exports for the week profiled eased to 3.248 million bpd, about 1.5 million bpd more than the same week in 2018. During the four weeks ended Oct. 11, exports averaged 3.125 million bpd versus 2.180 million bpd in the same four weeks last year. Liubov Georges, 1.646.359.4088, liubov.georges@dtn.com, www.dtn.com. (c) 2019 DTN. All rights reserved.