DTN Oil

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange pared gains late morning Wednesday after weekly inventory data from the Energy Information Administration showed total U.S. oil and petroleum stockpiles rose 10.5 million barrels (bbl) during the first week of September as domestic crude production jumped to a fresh three-year high, exports fell, and demand for gasoline plummeted following the Labor Day holiday.

Further details of EIA's report showed commercial oil stocks increased 4 million bbl last week to 420.6 million bbl, and currently stand 3% below the five-year average. The outsized build countered market expectations for a 1.9-million-bbl drawdown and marked the first increase in crude stockpiles since the first week of August.

Oil stored at the Cushing tank farm in Oklahoma, the delivery point for West Texas Intermediate, fell 2.5 million bbl from the previous week to a 25-million-bbl nine-month low, showed EIA.

U.S. crude oil production rose 100,000 barrels per day (bpd) to 12.9 million bpd -- the highest output since the week-ended March 27, 2020.

The refinery run rate, meanwhile, unexpectedly rose 0.6% from the previous week to 93.7% of capacity compared with expectations for a 0.2% decrease. Domestic refiners processed 16.8 million bpd in the reviewed week, some 177,000 bpd higher than during the prior week.

In the gasoline complex, commercial stockpiles increased 5.6 million bbl to 220.3 million bbl compared with analyst's expectations for a 300,000-bbl decline. Demand for gasoline slid from a nine-week high 9.321 million bpd post-Labor Day holiday, down a steep 1.014 million bpd. On a four-week basis through Sept. 8, gasoline supplied to the U.S. market averaged 8.9 million bpd, 4% above the comparable year ago period.

Distillate inventory increased 3.9 million bbl from the previous week to 122.5 million bbl and now stand about 13% below the seasonal five-year average. Demand for middle distillates fell 288,000 bpd in the reviewed week to 3.578 million bpd. Distillate fuel supplied to the domestic market averaged 3.7 million bpd over the past four weeks, up 5.4% from the same period last year.

Near noon in New York, October WTI futures were little changed near $88.85 bbl after climbing to $89.64 fresh 10-month high on the spot continuous chart. October ULSD futures advanced $0.0845 to $3.4125 gallon, and October RBOB futures traded near $2.7330 gallon, up $0.0057.

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