Weekly US Energy Information Administration Weekly Inventories Report
U.S. crude stocks and distillate inventories fell in the latest week as refiners picked up processing rates, though fuel demand weakened, the EIA said on Wednesday.
Crude inventories fell by 2 million barrels in the week to September 25 to 492.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.6 million-barrel rise.
Exports rose while imports fell, helping facilitate the drawdown. Net U.S. crude imports fell last week by 536,000 barrels per day, the EIA said.
U.S. gasoline stocks rose by 683,000 barrels in the week to 228.2 million barrels, the EIA said, compared with expectations for a 1.1 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 3.2 million barrels in the week versus expectations for a 917,000-barrel drop, the EIA data showed.
The EIA also said refinery crude runs rose by 300,000 barrels per day in the last week, EIA said. Refinery utilization rates rose by 1 percentage points, in the week.
Product supplied, a proxy for fuel demand, dropped in the most recent week, particularly due to a falloff in distillate demand, though gasoline product supplied rose modestly.
The price action suggests that traders are content with leaving the markets inside a trading range. The basic fundamentals haven’t changed this week except that refiners are starting to tick up activity, while gasoline and distillate demand is firming. This suggests a trend of tightening supply in the U.S.
Putting together this trend along with the support from the OPEC+ production cuts and we get support. Fear of lower demand because of rising COVID-19 cases in putting a cap on prices. Added together, we get a rangebound trade with traders likely willing to wait for a coronavirus cure before committing big money to the upside.