Oil Futures Up on Bullish Products despite U.S. Crude Buil
7/18 2:56 PM
Oil Futures Up on Bullish Products despite U.S. Crude Build
OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New
York Mercantile Exchange and Brent crude on the Intercontinental Exchange
settled higher after trending lower initially, following the release of weekly
supply data from the Energy information Administration showing a surprise
increase in commercial crude oil inventories amid increased gasoline demand and
reduced distillate supplies.
EIA data showed U.S. commercial crude inventories increased 1.5% or 5.8
million bbl to 441.1 million bbl during the week ended July 13, besting earlier
supply projections from the American Petroleum Institute predicting a 629,000
bbl build. At the same time, demand for gasoline increased 433,000 bpd to 9.708
million bpd, while stocks dropped 3.2 million bbl to 235.8 million bbl. EIA
reported distillate demand up 336,00 bpd to 4.141 million bpd, while production
fell 268,000 bpd to 5.174 million bpd.
Analysts said more bullish data was found that in stocks of crude at the
Cushing, Oklahoma supply hub -which is used as the delivery point for the West
Texas Intermediate crude contract- declined for a ninth straight week to 24.858
million bbl from 25.718 million bbl the week prior.
U.S. crude production reached 11.0 million bpd, the first time ever, EIA
"I think it is a combination of factors causing futures prices to rise with
the market reading that the increase in (crude) supply is based on some
temporary issues," said Phil Flynn, senior market analyst with Chicago-based
Price Futures Group. "We saw a decrease in exports while imports increased
which will tend to work themselves out, but overall, the demand numbers for
gasoline and bullish distillate inventories decided to turn the market around."
Flynn also mentioned today's emergency meeting of the Organization of
Petroleum Exporting Countries as somewhat bullish for the market.
"OPEC said it's going to stick to production cuts at the moment," he said.
"They're holding together despite the upcoming November sanctions on Iran and
have said that they won't dip below 100% compliance."
As of November 4, renewed oil sanctions go into effect on Iran, after the
United States pulled out of the 2015 Iran nuclear accord in May. The
International Energy Agency said in their monthly Oil Market Report released
July 12 that Iranian crude exports declined by 230,000 bpd in June from May,
"as European purchases dropped by nearly 50%."
At the 2:30 PM settlement, NYMEX August West Texas Intermediate crude
futures settled 68cts bbl higher at $68.76 bbl, while ICE September Brent crude
futures settled 74cts bbl higher on the day to $72.90 bbl, though still its
lowest price in more than three months. August RBOB gasoline futures rose
1.83cts gallon to $2.044 gallon, and the August ULDS contract gained 2.02cts
gallon to $2.0903 at settlement.
Brian Whary, 1.732.678.7739, firstname.lastname@example.org , www.dtn.com. (c) 2018
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