Crude oil prices plunged more than -2% on profit-taking. The front-month WTI contract settled at US$41.51/bbl, lowest since August 7. The front-month Brent contract fell to US$44.43/bbl, lowest since August 21, at close. WTI-Brent spread widened to US$ 2.92/bbl. The correction came in despite sharp draw in US inventory. Traders were concerned about falls in refinery demand, a result of sluggish economic recovery.
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks sank -7.75 mmb to 1428.28 mmb in the week ended August 28. Crude oil inventory slumped -9.36 mmb (consensus: -1.89 mmb) to 49.4 mmb. Stockpile fell in 3 out of 5 PADDs. PADD 3 (Gulf Coast) inventory alone sank -8.06 mmb during the week. Cushing stock added +0.11 mmb to 52.51 mmb. Utilization rate plunged -4.3 percentage point to 76.7% while crude production dropped -1.1 to 9.7M bpd for the week. Crude oil imports slipped -1.02 bpd to 4.9M bpd in the week.Concerning refined oil product inventories, gasoline inventory fell -4.32 mmb to 234.86 mmb although demand fell -4.09% to 8.76M bpd. The market had anticipated a -3.04 mmb decrease in stockpile. Production gained +0.17% to 9.53M bpd while imports rose +7.05% to 0.58M bpd during the week. Distillate slipped -1.68 mmb to 177.52 mmb. The market had anticipated a -1.36 mmb decrease. Demand slipped -1.01% to 3.92M bpd. Production dropped -6.7% to 4.78 mmb while imports gained +28.68% to 0.17M bpd during the week.
Released after market close on Wednesday, the industry-sponsored API estimated that crude oil inventory declined -6.36 mmb during the week. For refined oil products, gasoline inventory fell -5.76 mmb while that for distillate was down -1.42 mmb.
– advertisement –