WTI Ends at 5Mos. High on Supportive PMI Data, Crude Draw


   
    

   WASHINGTON, D.C. (DTN) -- Nearby delivery month oil futures on the New York 
Mercantile Exchange and Brent crude on the Intercontinental Exchange posted 
across-the-board gains Wednesday, although all contracts moved off session 
highs spurred by the sharp drop in U.S. crude oil inventories and supportive 
data on economic activity last month.

   The U.S. dollar extended its recent decline into afternoon trade Wednesday, 
eroding 0.60% to a better than 2-year low 92.815 against the basket of foreign 
currencies, also supporting higher West Texas Intermediate crude futures.

   On the session, the front-month WTI contract advanced 49cts to $42.19 bbl 
and international Brent crude settled with 74cts gain at $45.17 bbl. NYMEX ULSD 
September futures finished the session marginally higher at $1.2631 gallon and 
front-month RBOB futures added 0.85cts to $1.2228 gallon.

   Economic activity in the U.S. service sector expanded at a robust pace in 
July with the Institute for Supply Management's non-manufacturing Purchasing 
Managers Index rising to a score of 58.1%. The new reading beat the market 
expectation of 55%. Further details of the report revealed that the New Orders 
Index climbed to 67.7%, although the Employment Index edged lower from 43.1% to 
42.1%, indicating private business hire less than in a prior month. The Private 
Payroll Data collected by ADP badly missed market expectations today, with a 
mere 162,000 new jobs added in July compared with forecasts of 1.2 million jobs.

   U.S. equities finished the session sharply higher, with Dow Jones Industrial 
surging as much as 300-points and S&P 500 up 0.64%. 

   Separately, the U.S. Energy Information Administration reported domestic 
crude oil stockpiles slid 7.4 million bbl in the week ended July 31 to 518.6 
million bbl, a 16-week low. Analysts called for a more modest decline of about 
3.1 million bbl from the prior week. The large draw was realized even as crude 
exports slumped 392,000 bpd from the previous week to 2.819 million bpd and 
imports increased 0.9 million bpd. The refining capacity utilization rate rose 
by 0.1% from the previous week to 79.6%, the highest level since the final week 
of March.

   Gasoline demand continued to struggle in the most recent week, declining 
about 200,000 bpd or 2.2% to 8.617 million bpd, while stocks rose for the 
second week in a row, up by 419,008 barrels to 247.8 million barrels, while 
analysts were expecting a 2 million bbl decline.

    

    

   Liubov Georges, 1.646.359.4088, liubov.georges@dtn.com, http://www.dtn.com.




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