OIL FUTURES: NYMEX WTI surges 5% following US crude draw

New York — Crude prices settled sharply higher Sept. 16 after US Energy Information Administration data showed US crude inventory draws resumed during the week ended Sept. 11.

NYMEX October WTI settled $1.88 higher at $40.16/b and ICE November Brent was up $1.69 on the day to settle at $42.22/b.

US commercial crude inventories declined 4.39 million barrels during the week ended Sept. 11 to 496.05 million barrels, EIA said, putting stockpiles 13.3% above the five-year average, in from 14.4% the week prior.

Total refinery net crude inputs climbed 700,000 b/d to 13.49 million b/d as utilization rates jumped 4 percentage points to 75.8% of capacity. An 820,000 b/d uptick in USGC inputs accounted for most of the bound, as regional refiners ramped up production in the wake of Hurricane Laura, which took 2.34 million b/d of refinery capacity offline as it made landfall as a Category 4 storm along the Texas-Louisiana border Aug. 27.

Despite the uptick, USGC refinery crude demand remains around 14% below pre-Laura levels, as two refiners -- Citgo's 418,000 b/d Lake Charles plant and Phillips 66's 260,000 b/d Westlake facility -- remain offline due to storm damage.

"[The crude draw] along with rising [refinery] demand suggests that the market is putting to rest much of the concern that demand is going in reverse," TD Securities head of commodity strategy Bart Melek said in a note.

It was the largest one-day jump for front-month Brent and WTI on percentage basis since June 24.

US Federal Reserve will maintain its current dovish market stance for the foreseeable future, chairman Jerome Powell confirmed Sept. 16. The widely expected move is bearish for the US dollar in the longer term, and thus supportive for dollar-denominated commodities including oil.

RBOB gleans some support from Trainer outage

NYMEX October RBOB settled 5.08 cents higher at $1.1889/gal and October ULSD climbed 1.7 cents higher to settle at $1.1163/gal.

Monroe Energy's 190,000 b/d refinery in Trainer, Pennsylvania, is in the process of restarting after a power outage the night of Sept. 15, a source familiar with refinery operations said.

The outage offered some additional support to RBOB futures, especially early in the session, traders said, but others noted that the bulk of the sharp run up in prices was due to the general rise in crude prices following the inventory draw.

Nationwide gasoline stocks dipped 380,000 barrels to 231.52 million barrels, narrowing the surplus to the five-year average to 2.8%, the lowest since mid-March, EIA data showed. But distillate stocks, in contrast, were testing multi-decade highs after climbing 3.46 million barrels higher to 179.31 million barrels.