West Texas Intermediate crude climbed for the first time in three days as US stockpiles plunged more than anticipated last week. Brent increased.
Inventories declined by 4.47 million barrels in the week that ended Aug. 15, a weekly report from the Energy Information Administration showed. A Bloomberg survey of analysts had anticipated a drop of 1.75 million. Use of refinery capacity soared for the first time in five weeks.
“This was well in excess of what folks thought the draw would be. “Refinery activity was up pretty significantly, which increased crude demand and prices are responding appropriately,” Adam Wise of John Hancock in Boston told Bloomberg.
The October WTI futures added 42 cents or 0.5% to $93.28 per barrel as of 1:19 pm. The September contract rose 1% to $95.38. The volume of all futures changing hands was 34% lower than the average for the past 100 days.
October-delivery Brent climbed 50 cent or 0.5% to $102.06 per barrel on the London-based ICE Futures Europe exchange. Volume was 21% lower than the average for the past 100 days. It touched a premium of $8.72 to the October US crude benchmark on the ICE.
Inventories at Cushing, Oklahoma, the delivery hub for WTI futures and the biggest oil-storage point in the USA, jumped 1.76 million to 20.2 million.
“Crude stocks are down, which would be bullish for oil in general. We had a big gain in stocks at Cushing. That’s really negative for WTI,” economist James Williams of WTRG Economics said.
According to the Wall Street Journal, the drawdown in supplies resulted from heightened utilization of refineries as Andy Lipow of Lipow Oil Associates in Houston said. Analysts had anticipated the utilization rate to drop by 0.3% of a point in the week.
Gasoline inventories climbed by 585, 000 barrels to 213.3 million. Analysts had projected a 1.3 million-barrel slip.
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