Oil Futures Slide as Fuel Demand DN, Gasoline Stocks Build
WASHINGTON, D.C. (DTN) -- In post-inventory trade Wednesday, crude and
refined product futures on the New York Mercantile Exchange moved sharply lower
as government data showed demand for refined fuels plummeted during the
week-ended Oct. 16, and gasoline inventories unexpectedly increased with a draw
in commercial crude oil stocks smaller than expected.
Near 11:30 AM ET, the November RBOB contract plunged more than 4cts to trade
near a three-week low $1.1433 gallon after inventory data from the Energy
Information Administration reported a surprise 1.9 million bbl build occurred
in domestic gasoline supplies and demand for the transportation fuel eroded for
the second straight week through Oct. 16.
At 8.289 million bpd, gasoline supplied to the U.S. market, a measure of
demand, fell to the lowest weekly rate since the week-ended June 14, down
nearly 14% versus a year ago. Markets have grown increasingly concerned over
slowing gasoline demand during the fourth quarter amidst mounting layoffs and
historically high unemployment rate.
Distillates fuels stocks declined a more-than-expected 3.8 million bbl to
160.7 million bbl -- the lowest inventory since the week-ended May 17th. Demand
for distillate fuels, however, declined 587,000 bpd in the reviewed week after
climbing to above 4 million bpd in the previous week. Distillate output also
declined, falling a second week to a 4.131 million bpd more than three-year low.
NYMEX ULSD November futures dropped more than 4cts or 3% to trade at $1.1334
gallon in reaction to the data.
Offsetting bearish stats for refined products, commercial crude oil supplies
declined 1 million bbl to 488.1 million in the reviewed week even as refiners
again reduced crude throughputs to 13.026 million bpd. Domestic refiners
operated at 72.9% of their operable capacity last week, down 2% from the
Domestic crude production plunged 600,000 bpd last week to average 10.5
The December West Texas Intermediate futures declined $1.52 or 3.6% to trade
at $40.26 bbl.
Liubov Georges, 1.646.359.4088, firstname.lastname@example.org, http://www.dtn.com
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