U.S. crude oil hits highest since November as inventories drop to YTD lows
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U.S. crude oil futures surge nearly 4% Wednesday, reaching new highs for the year, after data showed a larger than expected drop in U.S. crude supplies last week.
WTI crude oil (CL1:COM) on Nymex for November delivery traded +3.9% to $93.94/bbl, touching its highest level since November last year, and November Brent crude (CO1:COM) was +3% at $96.84/bbl.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (NRGU), (NYSEARCA:XLE), (XOP), (VDE), (OIH), (XES), (IEZ)
The Energy Information Administration reported U.S. crude inventories fell by 2.2M barrels last week to 416M barrels, the lowest total since December 2, 2022, and are now 4% below the five-year average.
Gasoline inventories rose by 1M barrels to 220M barrels, and distillate stocks increased 400K barrels to 120M barrels - still ~13% below the five-year average - but crude oil at the Cushing, Oklahoma, delivery hub fell 900K barrels to 22M, the lowest total since July last year.
Tight inventories at Cushing have been cited as a factor in WTI's rally and driving the oil market into backwardation; the November WTI contract's premium over the December contract widened sharply to ~$2.20.
Energy (XLE) is easily the day's leading sector performer, comprising at least 11 of the top 15 gainers on the S&P 500: Marathon Oil (MRO) +4.4%, APA Corp. (APA) +4%, Occidental Petroleum (OXY) +3.6%, Hess (HES) +3.5%, Devon Energy (DVN) +3.3%, ConocoPhillips (COP) +3.2%, Pioneer Natural Resources (PXD) +3.2%, Halliburton (HAL) +2.9%, Diamondback Energy (FANG) +2.8%, Coterra Energy (CTRA) +2.8%, Targa Resources (TRGP) +2.7%.
Industry giants Exxon Mobil (XOM) and Chevron (CVX), +2.1% and +1.8% respectively, also are helping the group extend its September advance to more than 4% compared to a 5.3% S&P 500 loss so far this month.

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