Oil Has Longest Winning Run in Over a Year as Supply Glut Easesby and
Crude inventories fell by 2.51 million barrels last week: EIA
Gasoline supplies declined 2.7 million vs 1.7 million expected
Oil rose a fifth session in New York, making the longest winning streak since April 2015 as U.S. crude and fuel stockpiles dwindle.
Futures added 0.5 percent. Crude inventories fell by 2.51 million barrels in the week ended Aug. 12, according to an Energy Information Administration report. A Bloomberg survey ahead of the data had forecast an inventory build of 950,000 barrels. Gasoline supplies dropped by 2.7 million barrels, more than the 1.7 million decline that had been forecast. Refineries used 268,000 barrels a day more crude than a week earlier.
Oil production climbed by 152,000 barrels a day, in part because of an adjustment to address disparities between weekly and monthly data, according to the EIA’s website. The dollar pared earlier gains after minutes from the Federal Reserve’s latest meeting indicated officials are split on the need for a rate hike soon. A weaker dollar increases investor appetite for commodities.
"We’ve got a trifecta here" said Rob Thummel, a managing director and portfolio manager at Tortoise Capital Advisors LLC who helps manage $14.1 billion. "There are lower crude inventories, lower gasoline and lower Cushing."
West Texas Intermediate for September delivery added 21 cents to settle at $46.79 a barrel on the New York Mercantile Exchange, the highest since July 6. Total volume traded was 37 percent above the 100-day average.
Brent for October settlement gained 62 cents, or 1.3 percent, to close at $49.85 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude settled at a $2.33 premium to WTI for October delivery.
U.S. crude stockpiles fell to 521.1 million, leaving supplies still at the highest seasonal level in decades, the EIA report showed. Inventories at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, fell by 724,000.
Refineries increased operating rates by 1.3 percentage points to 93.5 percent of capacity. Plants usually begin to cut back on operations in August as the peak-demand driving season comes to an end.
"The refinery buildup was a surprise," said Craig Bethune, a fund manager at Manulife Asset Management Ltd. in Toronto who focuses on energy and natural resources investments. "They must have seen opportunities to export before going into turnarounds."