West Texas Intermediate crude rose to the highest in almost three weeks as strong refinery demand reduced U.S. inventories. The U.S. benchmark’s discount to Brent narrowed to a three-month low.
Prices gained for a third time in four days. U.S. refineries operated at the highest rate in nine years in the week ended July 11, according to the Energy Information Administration. Crude inventories at Cushing, Oklahoma, the delivery point for WTI, dropped to a six-year low as oil flowed to theGulf Coast where prices were higher.
“The supply side really should keep us higher,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “Cushing is the delivery point so the drawdown there is giving the market a boost. The drop at Cushing is definitely favoring WTI over Brent.”
WTI for August delivery, which expires tomorrow, gained $1.46, or 1.4 percent, to $104.59 a barrel on the New York Mercantile Exchange, the highest settlement since July 1. The more-active September future was up 91 cents at $102.86. The volume of all futures was about 27 percent above the 100-day average.
August futures were $1.73 higher than September, the biggest spread between a front-month and second-month contract since September 2008.
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