Crude Oil WTI Futures Market News and Commentary
Oct WTI crude oil (CLU19) on Wednesday closed down -0.45 (-0.80%), Oct Brent crude oil (CBV19) closed up by +0.27 (+0.5%), and Oct RBOB gasoline (RBU19) closed up by +0.0157 (+1.01%). The energy complex settled mixed Wednesday with Oct Brent crude and Oct RBOB gasoline at 1-week highs on strength in equities and a larger-than-expected draw in weekly EIA crude inventories. Strength in corporate earnings results bolstered optimism in the U.S. economic outlook, which is supportive for energy demand. Wednesday's weekly EIA data was bullish for crude oil but bearish for products. Crude oil found support on the -2.73 million bbl decline in crude inventories, which was a larger decline than expectations of -1.5 million bbl. Also, crude supplies at Cushing, the delivery point for WTI futures, fell by -2.458 million bbl. On the bearish side, EIA gasoline stockpiles rose by +312,000, more than expectations of -200,000 bbl. Also, EIA distillate supplies unexpectedly rose +2.6 million bbl to a 6-month high, more than expectations for a draw of -250,000 bbl. Wednesday's economic data was positive for economic growth and energy demand after U.S. July existing home sales rose +2.5% to a 5-month high of 5.42 million, slightly stronger than expectations of +2.5% to 5.40 million. A slump in the crack spread Wednesday to a 6-1/2 month low was negative for crude prices since the weak crack spread discourages refiners from purchasing crude oil to refine into gasoline. Wednesday’s EIA data showed that U.S. crude oil inventories as of Aug 16 were +3.4% above the seasonal 5-year average, gasoline inventories were +4.2% above the 5-year average, and distillate inventories were -1.7% below the 5-year average. U.S. crude production was unchanged at 12.3 million bpd in the week of Aug 16, which was just slightly below May's record high of 12.4 million bpd.