Although the US inventory report triggered selloff in crude oil price to as low as 70.86, decline in USD boosted demand for commodities again in afternoon session. The WTI October contract added +0.3% to close at 71.31 while the Brent contract gained +0.6% to 69.83. RBOB gasoline closed flat Thursday while heating oil price climbed +0.7% to 1.79. Natural gas jumped +15% to 3.26.
Crude oil inventory drew -5.9 mmb in the week ended September 4 with the Gulf Coast leading the decline. Refinery runs increased by +0.15 mmb to 15.12 mmb while imports dropped -0.48 mmb to 9.1 mmb.
Gasoline stockpiles increased +2.1 mmb while the market had anticipated a draw. Gasoline demand dropped -2.7% on weekly basis to 9.283M. The surge in the previous week was merely due to retailers’ stocking before Labor Day holiday. In coming weeks, gasoline demand should decline further as the driving season has ended. Distillate stockpiles rose +2 mmb as driven by modest increase in import and -0.4% decrease in demand.
Natural gas jumped +15% to settle at 3.26 Thursday, the biggest rally since November 2004 as the US Energy Department reported gas storage gained +69 bcf, less than consensus of +72 bcf , to 3392 bcf in the week ended September 4.
Today in Asia, the energy complex remains firm as China, the world’s growth engine, reported better-than-expected economic data for August. According to the National Statistics Bureau, China’s industrial production rose +12.3% yoy during the month. The People’s Bank of China also reported tht lending increased +15.3% mom to RMB 410.4B in August.
Profit-taking initially dragged gold price to as low as 983.2. However, weakness in the dollar pushed the yellow metal up again. In Asia today, the benchmark contract regains the 1000 level and is currently trading at 1003.6.
