US cash crude grades rise on supply concerns, strong refinery demand
USO•US cash crude grades broadly rose on Thursday as supply concerns and strong US refinery demand supported prices. US refiners averaged more than 95% capacity utilization from May through September, the highest for those months since 1998.
1. Crude grades and futures
US cash crude grades broadly rose on Thursday, dealers said, citing supply concerns and strong refinery demand. During the second full day of the roll-trading period, November-to-December positions traded at $6.55 a barrel. Mars Sour rose $4 to a $10 premium midpoint, while WTI Midland gained $1.10 to an 80-cent premium midpoint; Light Louisiana Sweet fell $1.10 to a $6.90 premium midpoint.
2. Refinery demand and supply
US refinery utilization averaged more than 95% of capacity from May through September, the highest rate for those months since 1998, the Energy Information Administration said. Citi said near-term oil-price risks remained skewed to the upside, citing shipping bottlenecks that keep delivered supplies tight. December Brent futures settled up $4.35 at $113.17 a barrel, and December WTI futures gained $2.32 to $99.47.
3. Defense production measure
President Donald Trump determined that petroleum production, refining and related activities are essential to national defense, and invoked the Defense Production Act to allow financial incentives for those activities, pipelines and energy storage. Saudi Aramco reportedly told staff to evacuate its Dhahran headquarters as fighting between Saudi Arabia and Yemen's Houthis intensified.
