DTN Oil

WASHINGTON (DTN) -- Crude and refined products futures on the New York Mercantile Exchange declined in post-inventory trade Wednesday after government data from Energy Information Administration reported total U.S. crude and oil products inventories increased more than 15 million barrels (bbl) during the week ended June 4, as demand for refined fuels eroded and refinery runs jumped to the highest utilization rate in 18 months.

Stocks of gasoline and distillate fuels increased by a massive 11.4 million bbl from the previous week, with 7 million bbl of the build accumulating in gasoline stocks. At 241 million bbl as of June 4, nationwide gasoline stockpiles stand about 1% above the five-year average. The larger-than-expected increase was realized as demand for motor gasoline eroded for the second straight week, down 666,000 barrels per day (bpd) to 8.480 million bpd during the week ended June 4. Earlier this week, EIA forecasted gasoline demand would average 9.1 million bpd this summer, which is 1.3 million bpd more than last summer but still about 400,000 bpd less than summer 2019.

Distillate stocks climbed by 4.4 million bbl from the previous week to 137.2 million bbl and are now about 5% below the five-year average. The build in distillate stocks far exceeded analyst expectations for a smaller 1.3 million bbl increase. Distillate supplied to the U.S. market fell 400,000 bpd from the week prior to 3.413 million bpd.

Offsetting losses for the oil complex, the data also showed commercial crude oil stockpiles declined by a larger-than-expected 5.2 million bbl from the previous week to 474 million bbl, about 4% below the five-year average. Earlier this week, analysts expected crude stocks to have fallen by 2.3 million bbl.

Oil stored at Cushing, the delivery point for West Texas Intermediate, rose by 165,000 bbl from the previous week to 45.7 million bbl.

Domestic refiners processed 15.925 million bpd of crude oil, hiking utilization rates by 2.6% from final week of May to 91.6% of capacity -- the highest run rate since the first week of January 2020.

Near the noon hour in New York, NYMEX July WTI futures slipped below $70 bbl to $69.70 bbl, and August Brent crude traded little changed near $72.10 bbl. NYMEX July RBOB futures declined 2.5 cents to near $2.1940 gallon and the front-month ULSD contract fell 1 cent to $2.1250 gallon.

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