Massive Decline in Crude Oil Supplies Leads to Big Gain for WTI, Brent Crude on Thursday

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Oil futures soared on Thursday after U.S. government data revealed the largest drop in crude supplies since 1999, according to Bloomberg MarketWatch.

The 14.5 million-barrel decline reported by the Energy Information Administration was even larger than the surprise 12.1-million barrel drop reported by the American Petroleum Institute late Wednesday. Ahead of both reports, analysts polled by S&P Global Platts expected a 425,000-barrel increase.

“The large draw in crude oil inventory was driven by a large decline this week in crude oil imports, primarily weather-related, while refinery runs continued to be quite strong,” said Robert Merriam, manager of Petroleum Supply Statistics at the EIA. He confirmed that the weekly supply drop was the largest since the week ending January 1, 1999.

On the New York Mercantile Exchange, October West Texas Intermediate crude jumped $2.12, or 4.7%, to settle at $47.62 a barrel.

On London’s ICE Futures Exchange, November Brent crude climbed $2.01, or 4.2%, to end trading at $49.99 a barrel.

For now, the oil market “is still technically range-bound in the mid-$40’s as traders questioned whether or not global producers will agree on any sort of bullish freeze deal later this month, while other fundamentals such as stalling U.S. production declines and record stockpiles world-wide are bearish,” said Tyler Richey, co-editor of The 7:00’s Report.

The U.S. Energy Information Administration revealed weekly net crude imports fell by about 1.8 million barrels a day. The EIA data also showed that total domestic production edged down by 30,000 barrels a day last week to 8.458 million barrels a day, though output rose by 15,000 barrels a day in the lower 48 states.

On the New York Mercantile Exchange, October natural gas settled up 13 cents, or 4.9%, at $2.806 per million British thermal units.

 

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