LONDON(Commodity Online): Crude oil markets were buoyant through most of yesterday's trade, but closed fairly flat, with front month Brent rising for a seventh straight day, gaining 83 cents to close at $114.85/bl, while the equivalent WTI contract edged lower by 9 cents to $88.81/bl. The latest weekly EIA data adds to the recent series of somewhat more constructive indications on US oil demand. Last week was the fifth straight reading for total US demand above 19 mb/d. Total demand is now lower y/y by 114 thousand b/d (-0.6%) with gasoline lower y/y by 1% and distillates by 0.5%, the latter having improving materially after factoring in this week’s stronger gasoline and distillate figures of 9.23 mb/d and 4.09 mb/d, respectively. Overall, the latest readings add further length to the gently improving trajectory for US oil demand seen since the end of Q2.
On the inventory front, the crude and products inventory overhang above the five-year average increased by 1.9 mb, with all of the build originating from crude. Crude oil stocks increased their difference to the five-year average by 4.8 mb to 21.5 mb, as a further tranche of 4.7 mb of SPR flowed into the market over the week.
The latest tranche of SPR release brings the total to date release to 24.7 mb, with 82% of the declared 30.6 mb now in the data. Against that backdrop, crude oil inventories have built by only 4.5 mb relative to the five-year average during the time of the release. Product inventory dynamics were constructive as the inventory overhang fell by 3 mb with gasoline contributing to half of the draw. Cushing crude oil inventories have drawn down for the fifth week in a row, with the latest weekly stockpiles falling by 0.57 mb to be 2.7 mb lower y/y.
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