Oil surges to 3-year high as US stockpiles plunge

Bloomberg

Oil rose to a level last seen in late 2014 after US crude stockpiles tumbled by the most since September 2016.
Domestic crude inventories declined by 9.89 million barrels last week, while refiners boosted oil processing rates and exports soared to a record, the Energy Information Administration said. Oil stored at the key pipeline hub in Cushing, Oklahoma, shrank for a sixth straight week.
Prices already were elevated as US President Donald Trump’s administration sou-ght to dissuade purchases of oil from Iran, OPEC’s third-largest crude producer.
“Obviously, a very bullish draw” on American inventories, driven by record crude exports and refinery processing rates, said Nick Holmes, an analyst at Tortoise Capital Advisers in Leawood, Kansas, which manages $16 billion in energy-related assets. “Exports continue to be extremely robust.”
Supply risks from Iran to Venezuela have buoyed crude markets, even as the Organization of Petroleum Exporting Countries and allies such as Russia pledged to relax production caps. Record exports of US crude last week indicated American producers were shipping out as much, if not more, oil than Iran, according to Bloomberg calculations.
At least some buyers of Iranian supplies are considering acquiescing to Trump’s demand. Japan’s Fuji Oil Co and Taiwan’s Formosa Petrochemical Corp are discussing ending imports from the source of 10 percent of OPEC’s output, though no final decisions have been made.
The EIA reported that crude exports jumped to 3 million barrels a day last week, while refinery utilization rates increased to the highest since 2005 and refinery demand for all sorts of feedstocks jumped to a record, all contributing to the crude stockpile decline.
Gasoline futures rose 2.7 percent to $2.1307 a gallon. Kazakhstan’s output slipped by about 240,000 barrels a day, data from the country’s Ministry of Energy showed.