DTN Oil

WASHINGTON (DTN) -- Crude and refined products futures on the New York Mercantile Exchange swung between modest gains and losses late morning Wednesday after government data reported U.S. commercial crude oil inventories unexpectedly increased last week amid a slow recovery in refinery activity following Hurricane-Ida disruptions and an increase in oil production. A smaller-than-expected build in gasoline inventories and strengthening demand for motor gasoline also lent price support.

The U.S. Energy Information Administration reported gasoline inventories increased 193,000 barrels (bbl) during the week ended Sept. 24 to 221.8 million bbl compared with expectations for inventories to have gained 900,000 bbl. Demand for motor gasoline, meanwhile, jumped by 503,000 barrels per day (bpd) from the previous week to 9.399 million bpd -- the highest weekly demand rate since the Labor Day holiday. Midmorning data is consistent with findings in DTN's Refined Fuels Demand Data showing gasoline demand in the United States increased 1.4% last week.

Distillate inventories rose 384,000 bbl to 129.7 million bbl last week compared with calls for a 1.3 million bbl drawdown. Demand for distillate fuels, often seen as a proxy for economic activity, slipped below 4 million bpd, down 451,000 bpd from the previous week.

Countering gains for the oil complex, EIA showed nationwide crude oil inventories increased by 4.6 million bbl in the reviewed week compared with calls for a 2.5 million bbl drawdown. At 418.5 million bbl, commercial crude oil inventories currently stand about 7% below the five-year average after a nearly two-month destocking period.

Oil stored at Cushing, the delivery point for West Texas Intermediate futures, rose 131,000 bbl from the previous week to 34 million bbl, EIA said in its weekly report.

The unexpected build was realized as domestic crude production rose by 500,000 bpd last week to 11.1 million bpd, with offshore operators in the U.S. Gulf of Mexico continuing to recover from Hurricane Ida-caused shutdowns. Meanwhile, refiners increased crude throughput by a modest 68,000 bpd to 15.415 million bpd, while boosting run rates by a less-than-expected 0.6% from the previous week.

Total products supplied over the last four-week period averaged 20.4 million bpd, up 13.7% from the same period last year. Over the past four weeks, motor gasoline product supplied to the U.S. market averaged 9.2 million bpd, up 8.5% from the same period last year. Distillate fuel product supplied averaged 4 million bpd over the past four weeks, up 12.3% from the same period last year.

Near 12:15 p.m. EDT, NYMEX November WTI futures gained modestly to $75.44 bbl, October RBOB futures rallied 2.85 cents to $2.2304 gallon, and October ULSD contract gained 1.98 cents to trade near $2.3088 gallon.

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