WTI Crude Near One-Week High as Cushing Inventories Fall
West Texas Intermediate traded near the highest price in a week as crude stockpiles fell at the main U.S. oil storage hub, and gasoline demand reached a three-month high. Brent in London was steady.
U.S. futures were little changed after rising 1.1 percent yesterday to close above $100 a barrel for the first time in a week. Supplies at Cushing, Oklahoma, the delivery point for WTI, shrank for the eighth week to the lowest in two years, the Energy Information Administration said. Gasoline demand exceeded 9 million barrels a day for the first time this year.
“Falling inventories at the delivery point for WTI futures is definitely driving crude up,” said Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul. “It looks like the supply bottleneck is being resolved.”
WTI for May delivery was at $100.33 a barrel, up 7 cents, in electronic trading on the New York Mercantile Exchange at 4:44 p.m. Seoul time. The contract gained $1.07 to $100.26 yesterday, the highest settlement since March 19. The volume of all futures traded was about 43 percent below the 100-day average. Prices are up 1.9 percent this year.
Brent for May settlement was 3 cents lower at $107 a barrel on the London-based ICE futures Europe exchange. The European benchmark crude was at a premium of $6.67 to WTI.
Cushing stockpiles decreased by 1.33 million barrels to 28.5 million in the week ended March 21, according to the EIA, the Energy Department’s statistical unit. Stockpiles started falling in January after the southern link of TransCanada Corp.’s Keystone XL pipeline to the Texas Gulf Coast opened, easing a bottleneck from the storage hub.
Inventories along the Gulf of Mexico, known as PADD 3, rose 6.06 million barrels to 200.3 million, the most in EIA data begun in 1990 and the 10th weekly gain. The pipelines from Cushing to Houston move oil to PADD 3 from PADD 2, which includes Oklahoma.
Total U.S. crude inventories expanded by 6.62 million barrels to 382.5 million, the EIA said, compared with a projected increase of 2.5 million.
Gasoline consumption rose 5.8 percent last week to 9.002 million barrels a day, the highest level since Dec. 20, EIA data show. Supplies of the motor fuel fell by 5.1 million barrels to 217.2 million. Distillate stockpiles, including heating oil and diesel, increased by 1.56 million barrels to 112.4 million.
U.S. oil production slid 0.3 percent to 8.19 million barrels a day, down from the highest rate in almost 26 years the previous week, according to the EIA.
Libya, with an output capacity of 1.5 million barrels a day, is producing only 171,000 barrels a day as ports and fields remain shut amid political unrest, Mohamed Elharari, a spokesman for state-run National Oil Corp., said by phone yesterday. The government is negotiating with protesters about restarting the Sharara oilfield, the country’s second-largest, Elharari said.
U.S. President Barack Obama said yesterday after a meeting with European leaders that there were consequences for being complacent over Russia’s annexation of Crimea from Ukraine and warned that Russia can’t run “roughshod” over its neighbors.
The Houston Ship Channel, home to the nation’s largest petrochemical complex and export port, reopened all lanes of traffic yesterday for the first time since a March 22 oil spill.
To contact the reporter on this story: Heesu Lee in Seoul at ten.g1495612792rebmo1495612792olb@5149561279224eel1495612792h1495612792
To contact the editors responsible for this story: Pratish Narayanan at ten.g1495612792rebmo1495612792olb@91495612792nanay1495612792aranp1495612792 Ramsey Al-Rikabi