Wed, Feb 01, 2023 @ 08:37 GMT
HomeAction InsightOil N' GoldWTI-Brent Spread Narrowed on Hurricane and Inventory Draw

WTI-Brent Spread Narrowed on Hurricane and Inventory Draw

Crude oil prices firmed with WTI-Brent spread narrowing slightly on Wednesday. Hurricane Laura, now a catastrophic Category 4 hurricane, is expected to an “unsurvivable storm surge,” extreme winds and flash floods over Eastern Texas and Louisiana. This could likely cause damage in oil production facilities in Gulf Coast. Meanwhile, further decline in US oil inventory also supported crude oil prices.

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks plunged -7.78 mmb to 1436.04 mmb in the week ended August 21. Crude oil inventory declined -4.69 mmb (consensus: -3.69 mmb) to 507.76 mmb. Stockpile fell in 4 out of 5 PADDs. PADD 3 (Gulf Coast) inventory alone declined -2.45 mmb during the week. Cushing stock slipped -0.28 mmb to 52.4 mmb. Utilization rate added +1.1 percentage point to 82% while crude production steadied at climbed higher, by +0.1M bpd, to 10.M bpd for the week. Crude oil imports gained +0.19 bpd to 5.92M bpd in the week. Concerning refined oil product inventories, gasoline inventory fell -4.58 mmb to 239.18 mmb as demand gained +6.15% to 9.16M bpd. The market had anticipated a -1.53 mmb decrease in stockpile. Production gained +1.26% to 9.52M bpd while imports dropped -3.23% to 0.54M bpd during the week. Distillate added +1.39 mmb to 179.2 mmb. The market had anticipated a -0.73 decrease. Demand jumped +21.67% to 3.95M bpd. Production rose +8.01% to 5.12 mmb while imports soared +168.75% to 0.13M bpd during the week.

Released after market close on Wednesday, the industry-sponsored API estimated that crude oil inventory declined -4.52 mmb during the week. For refined oil products, gasoline inventory plunged -6.39 mmb while that for distillate was added +2.26 mmb.

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