Thursday, March 27, 2014

WTI rising amid shrinking Cushing supplies

U.S. futures were little changed after rising 1.1% yesterday to close above $100 a barrel for the first time in a week. Supplies at Cushing, Oklahoma, the delivery point for WTI crude oil, shrank for the eighth week to the lowest in two years, the Energy Information Administration said. Gasoline demand exceeded 9 million barrels a day for the first time this year. Cushing stockpiles decreased by 1.33 million barrels to 28.5 million in the week ended March 21, according to the Energy Department’s statistical unit. Stockpiles started falling in January after the southern link of TransCanada Corp.’s Keystone XL pipeline to the Texas Gulf Coast opened, easing a bottleneck from the storage hub. Total U.S. crude inventories expanded by 6.62 million barrels to 382.5 million, the EIA said, compared with a projected increase of 2.5 million. Gasoline consumption rose 5.8% last week to 9.002 million barrels a day, the highest level since December 20, EIA data show. Supplies of the motor fuel fell by 5.1 million barrels to 217.2 million.
Regarding the Libyan matter, with an output capacity of 1.5 million barrels a day, is producing only 171K barrels a day as ports and fields remain shut amid political unrest. The government is negotiating with protesters about restarting the Sharara oilfield, the country’s second-largest, Elharari said. WTI for May delivery was at $100.25 a barrel, down 1 cent, in electronic trading. The contract gained $1.07 yesterday to the highest settlement since March 19. The volume of all futures traded was about 47% below the 100-day average. Prices are up 1.8% this year.

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