Crude oil settles at 10-month highs following US inventory draw

New York — Crude futures settled higher Dec. 16 on the heels of a larger-than-expected US crude inventory draw.

NYMEX January WTI settled 20 cents higher at $47.82/b and ICE February Brent climbed 35 cents to settle at $51.11/b.

US commercial crude stocks fell 3.14 million barrels to 500.1 million barrels during the week ended Dec. 11, US Energy Information Administration data showed Dec. 16. The draw left stockpiles around 10.3% above the five-year average, in slightly from 10.7% above average during the week prior.

Front-month Brent and WTI last settled higher on March 4 and Feb. 26, respectively.

Oil futures were trending lower ahead of the data release on expectations of a crude build. American Petroleum Institute data released late Dec. 15 showed US crude supplies rose 1.97 million barrels for the week ended Dec. 11.

NYMEX January RBOB settled 2.61 cents higher at $1.3529/gal and January ULSD was up 1.35 cents at $1.4779/gal.

The crude draw comes as US crude exports rebounded by 793,000 b/d over the week ended on Dec. 11 to 2.63 million b/d, after hitting a more than two-year low for US crude exports just the week prior.

US crude exports are expected to remain elevated for the rest of the month, pressuring inventories.

A flurry of VLCCs are expected for the end of December for long-haul runs east out of the USGC as rates for the supertanker have been particularly low in recent months.

There were seven fixtures reported for VLCCs loading in the USGC with Asian destinations in November, compared to 16 fixtures set to load over the course of December, according to Platts fixture logs. Nine of the 16 total fixtures are booked for loading in the second half of the month. There are currently five ships slated to load in January so far.

US gasoline inventories climbed for a fifth straight week in the week ended Dec. 11 as pandemic lockdowns weighed on demand

While weekly implied demand for gasoline climbed around 5% to 7.98 million b/d, it was still more than 15% behind year-ago levels, up from around 14% behind year-ago levels during the week prior. Meanwhile, the four-week moving average of implied demand fell for a fifth straight week and was the lowest since the week ended June 19 after falling 1% to 7.92 million b/d.

Apple Mobility accessed by Platts data shows US driving activity edged higher during the week ended Dec. 11 for the first time since the week ended Sept. 4. But driving activity in the states most hard hit by the pandemic continued to decline.

In California, where dwindling hospital resources triggered a near-statewide lockdown on Dec. 6, driving activity was the lowest since mid-May. New York activity edged up around 1 percentage point on from the week prior, but still held near levels last seen in late May.