NYMEX Crude Futures Lower After EIA

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange oil futures softened late morning Wednesday in reaction to a smaller-than-expected draw in U.S. commercial crude inventories and builds in gasoline and distillate stocks during the week ended July 12. U.S. production plunged to the lowest level in four and a half months, according to government data.

At 11:45 a.m. EDT, NYMEX August West Texas Intermediate crude futures traded down $0.48 at $57.14 barrel (bbl) while Intercontinental Exchange September Brent traded $0.31 lower at $64.05 bbl.

NYMEX August ULSD futures were up 0.30cts near $1.9079 gallon and the August RBOB contract decreased 0.13cts near $1.8905 gallon.

The Energy Information Administration midmorning reported U.S. commercial crude inventories fell 3.1 million bbl to 455.9 million in the second week of July, holding at about 4% above the five-year average. Government figures came below market expectations for a 4.2 million bbl draw, but exceeded the American Petroleum Institute's reported 1.410 million bbl draw.

Government figures showed domestic crude production plunged 300,000 barrels per day (bpd) during the week of July 12 to 12 million bpd, the lowest production rate since the week of March 8.

U.S. crude oil imports continued lower last week, down 470,000 bpd to average 6.8 million bpd, while four-week average imports totaled about 7.1 million bpd, 16.3% less than the same four-week period last year. The crude export rate fell 514,000 bpd to average 2.534 million bpd during the profiled week, while the four-week average was 880,000 or 20.28% higher than the same four weeks in previous year.

In refined products, EIA reported gasoline inventories increased 3.6 million bbl to 232.8 million bbl, 1.3% lower than the same week last year but about 2% above the five-year average for this time of year. Data also showed gasoline production tumbled 563,000 bpd on the week to 9.855 million bpd, 4.2% lower than the same week a year ago. Implied gasoline demand also moved lower by 540,000 bpd to 9.214 million bpd, or 5.1% lower than the corresponding week a year ago.

Distillate fuel inventories extended higher for a third consecutive week, rising 5.7 million bbl to 136.2 million bbl, a 12.3% year-over-year supply surplus, yet about 2% below the five-year average for this time of year. Distillate fuel production nudged higher, up 3,000 bpd to 5.361 million bpd last week, 3.6% higher than a year ago. Implied demand for distillates added 14,000 bpd to 3.565 million bpd as of July 12, nearly 14% lower than the same week in 2018.

Liubov Georges can be reached at liubov.georges@dtn.com

(BAS)