Much of the oil complex rallied Wednesday after bullish US Energy Information Administration oil data showed US refined product stocks fell a combined 8.7 million barrels last week.
NYMEX December crude settled $1.43 higher at $94.80/barrel. December RBOB settled 3.19 cents higher at $2.5480/gal, and December ULSD ended 55 points higher at $2.8696/gal.
ICE December Brent lagged the rest of the complex, settling 9 cents lower at $105.24/b.
“The bullishness is derived by declining product stocks and is bringing things off of some basing lows,” CHS Hedging analyst Tony Headrick said.
NYMEX crude Wednesday reversed six straight days of declines that pushed the front-month contract to a four-month low of $93.37/b Tuesday.
“The fundamentals of supply and demand are going to be driven by diesel — which is lagging, surprisingly — as it is the tightest of the three,” Headrick said.
EIA data showed US distillate stocks fell 4.9 million barrels to 117.82 million barrels last week, which featured a 2.3 million-barrel decline in US Gulf Coast ULSD stocks, which fell to 30.44 million barrels.
However, EIA data for US crude stocks was not nearly as bullish. US crude stocks rose 1.58 million barrels last week, putting them at 385.45 million barrels — a comfortable 11.7% premium to the five-year average.
Refinery utilization is expected to increase in the near term, in order to catch up with this improved demand profile, Headrick said.
US refinery utilization rates fell 0.5 percentage point to 86.8% of capacity last week amid continued planned and unplanned maintenance. That said, US refinery utilization rebounded last year around this time.
“This is what will provide support for WTI going forward,” he said.
Meanwhile, US gasoline stocks fell 3.8 million barrels to 210 million barrels for the reporting week ended November 1.