DTN Oil

WASHINGTON (DTN) -- Crude and refined products futures on the New York Mercantile Exchange are posting sharp losses in post-inventory trade Wednesday as large builds in refined products stocks joined with softer demand for motor gasoline during the lead-up to the Easter holiday offset larger-than-expected decline in commercial crude oil inventories and a surprise drop in domestic production.

In late morning trade, NYMEX May West Texas Intermediate futures declined 90 cents to trade at $58.43 per barrel (bbl), and the June Brent contract on ICE slid 88 cents to $61.88 per bbl. NYMEX May ULSD futures dropped 2.65 cents to near $1.7682 per gallon and NYMEX May RBOB fell 3.73 cents to $1.9294 per gallon.

U.S. Energy Information Administration midmorning Wednesday released a mixed inventory report, showing a larger-than-expected draw in nationwide crude stockpiles last week accompanied with a surprise increase in gasoline supply and a larger-than-anticipated build in distillate stocks.

On the bullish side, U.S. crude oil inventories fell for a second week to 498.3 million barrels (bbl), about 3% above the five-year average. The 3.5 million bbl crude draw was larger than analysts anticipated and above estimates from the American Petroleum Institute. Additionally, domestic crude production unexpectedly dropped 200,000 barrels per day (bpd) from the previous week to 10.9 million bpd after a three-week stretch of back-to-back gains.

The refining utilization rate increased by a modest 0.1% from the previous week to 84%.

On the bearish side, U.S. inventories of gasoline and diesel fuels rose last week by a combined 5.5 million bbl, with 4 million bbl of that increase occurring in gasoline inventories. Implied demand for gasoline declined 110,000 bpd from the previous week to 8.781 million bpd. Mobility data, meanwhile, showed many American drivers stayed off the road during the holiday week of Easter, with traffic activity dropping sharply before picking up again on Monday and Tuesday.

Distillate stocks rose by 1.5 million bbl from the previous week to 145.5 million bbl and are now 5% above the five-year average, the EIA said. Earlier in the week, analysts had expected distillate supplies would rise by a smaller 600,000 bbl from the previous week.

Distillate supplied to the U.S. market, a measure for demand, also fell 449,000 bpd to 3.664 million bpd. Total products supplied over the last four-week period averaged 19.3 million bpd, up by 5.5% from the same period last year.

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