Breaking News
0

Oil Rises on U.S. Crude Draw Surprise, but China Caps Gains

CommoditiesMay 08, 2019 03:57PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Barani Krishnan

Investing.com - The EIA has given oil bulls what China couldn't.

Dashed expectations for a U.S.-China trade deal after President Donald Trump's threatening tweet on more tariffs for Beijing wore crude futures down for two-straight sessions. But the EIA helped crude longs on Wednesday with an overwhelmingly bullish data set.

West Texas Intermediate futures, the benchmark for U.S. crude, settled up 72 cents, or 1.2%, at $62.12 per barrel. WTI finished the previous session at $61.40, the lowest settlement since March 29.

London Brent futures, the global benchmark for oil, settled up 49 cents, or 0.7%, at $70.37 a barrel, after a 2% tumble Tuesday.

Oil's gains were capped by a sluggish Wall Street, which had trouble finding direction on worries that a breakdown in trade talks between the world's top two economies will drag global growth lower. China's top trade negotiator, Vice Premier Liu He, was due to visit Washington on Thursday and Friday and will likely try to prevent Washington from raising tariffs to 25% from 10% on $200 billion of Chinese imports.

The EIA said in its regular weekly report that crude oil inventories slumped by nearly 4 million barrels in the week to May 3, versus forecasts for a build of 1.2 million barrels. Crude stockpiles had risen by a net of nearly 30 million barrels in five earlier weeks, and oil bears had expected the trend to continue.

"The fall in crude oil inventories also came despite lowered refinery operating rates," John Kilduff, founding partner at New York energy hedge fund Again Capital, said.

"Another bullish element was the very high demand for gasoline, which rivals peak summer driving season levels," Kilduff said. "Exports of crude oil fell, but remain at robust levels."

Refineries operated at 88.9% of capacity last week, just under the 90% threshold that's common in the run-up to summer when driving and gasoline demand is at its peak.

Gasoline inventories fell by about 600,000 barrels last week against expectations for a 430,000-barrel draw.

Distillate stockpiles decreased by 160,000 barrels, compared to forecasts for a decline of 1.1 million.

Adding to the upbeat sentiment was a drop in U.S. crude production as a whole from record highs of 12.3 million barrels per day in the previous week to 12.2 million bpd.

Crude imports fell by 432,000 barrels to 4.37 million, demonstrating again the squeeze applied on the market by Saudi Arabia and others in OPEC who are selling their production only to the highest-bidding U.S. refineries.

The only negatives that mattered in the EIA report were stockpiles at the Cushing, Okla., storage hub for WTI, which rose by 821,000 barrels versus the previous week's 265,000 and a 289,000-barrel slide in U.S. crude exports to 2.3 million, which correlated with the Cushing build.

Oil Rises on U.S. Crude Draw Surprise, but China Caps Gains
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email