Crude oil futures on Thursday, September 8, recorded their highest settlement in at least two weeks after the U.S. government data revealed the largest drop in crude supplies since 1999.
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 climb, Mark.
“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,” Robert Merriam, manager of Petroleum Supply Statistics at the EIA, told MarketWatch. He confirmed that the weekly supply drop was the largest since the week ended Jan. 1, 1999.
Oil prices also found support from Chinese data that showed another big increase in the country’s crude imports.
October West Texas Intermediate crude CLV6, -0.65% added $2.12, or 4.7%, to settle at $47.62 a barrel on the New York Mercantile Exchange. That was the strongest dollar and percentage gain since April.
November Brent crude on London’s ICE Futures exchange LCOX6, +3.56% rose $2.01, or 4.2%, to $49.99 a barrel.
The settlement for WTI was the highest since Aug. 26 and highest for Brent since Aug. 19, according to FactSet data.
“Crude supply was down dramatically on lower imports,” said James Williams, energy economist at WTRG Economics. “Imports fell because of ships delayed” by last week’s storm.
Weekly net crude imports fell by about 1.8 million barrels a day, the EIA said.
“We should see a spike in oil prices gradually reversed after the realization of the shipping delay sinks in,” Williams said. “Next week we will see a spike in imports and crude stocks as the delayed ships are unloaded.”
At the peak, as much as 22.1% of oil production in the Gulf of Mexico was halted on Aug. 30 due to a tropical depression in the region, which later became Hurricane Hermine, according to the Bureau of Safety and Environmental Enforcement. As much as 10.6% of natural-gas output was shut in, on Aug. 31, because of the storm.
The EIA data 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.
Gasoline supplies fell 4.2 million barrels, while distillate stockpiles rose by 3.4 million barrels, according to the EIA. The market was looking for a drawdown of 625,000 barrels for gasoline, while distillate stockpiles were seen up 1.1 million barrels, according to the S&P Global Platts survey of analysts.
