Crude oil futures closed lower on Wednesday, erasing earlier gains as data from the Energy Information Administration (EIA) showed a decline in weekly gasoline demand that outweighed support from the first drop in commercial crude supplies in five weeks.
Commercial crude oil stocks unexpectedly pulled back sharply by 6.4 million barrels to 453.6 million barrels in the week ended April 19 and were ~3% below the five-year average for the time of year, the EIA reported. However, U.S. implied gasoline demand fell by 239K bbl/day to 8.42M bbl/day, ~1.1M bbl/day below levels seen last year, while gasoline inventories fell by ~600K bbl, with inventories 4% off the seasonal five-year average.
The large crude draw was the result of very high crude exports, but it could be a one-off, as preliminary tanker tracking data this week shows lower exports, UBS analyst Giovanni Staunovo said.
The implied gasoline demand figures combined with the smaller than expected gasoline supply draw “poured some cold water on the market … as worries of a persistently tight physical fuel market are beginning to subside,” Sevens Report Research co-editor Tyler Richey told Marketwatch.
Front-month Nymex crude (CL1:COM) for June delivery closed -0.6% to $82.81/bbl, while front-month June Brent crude (CO1:COM) finished -0.4% to $88.02/bbl.
The drop in crude prices came alongside a record daily outflow of $376 million from the U.S. Oil Fund (USO), the largest oil ETF. This withdrawal topped the previous one-day record of $323 million set in 2009 and leaves USO with $1.3 billion in assets.
