Crudes, ULSD Futures End Up

CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange settled mixed, with the crude grades and ULSD contract ending higher, while RBOB futures settled down in reaction to weekly data from the Energy Information Administration that was mostly bearish.

EIA data showed large weekly changes in imports, exports and implied demand for the week-ended April 20, with the Weekly Petroleum Status Report showing U.S. crude exports spiked 582,000 bpd to a record high at 2.331 million bpd, and combined U.S. crude and products exports surged 1.607 million bpd to a record at 8.332 million bpd.

In addition to the export data, a 2.6 million bbl draw in distillate fuel inventory to a 122.7 million bbl three-year four-month low during the week-ended April 20 was bullish. The distillate draw also compared against a 1.911 million bbl decline reported Tuesday afternoon by the American Petroleum Institute.

Aside from these data points, EIA's report was bearish, especially for gasoline, with commercial inventory of the motor transportation fuel increasing 800,000 bbl to 236.8 million bpd, which compared with a 2.724 million bbl drawdown reported by API. The supply build was generated primarily by a 774,000 bpd drop in implied demand from a record weekly high to a 9.083 million bpd two-month low. During the four weeks ended April 20, gasoline supplied to market averaged 9.354 million bpd, up 117,000 bpd or 1.3% against the comparable year-ago period.

Total U.S. oil products supplied to market plunged 2.434 million bpd to a 19.0 million bpd 14-month low during the week, although cumulatively in 2018 through April 20 implied demand for oil products have averaged 20.56 million bpd, up 967,000 bpd or 4.9% against year prior.

EIA also reported a 2.2 million bbl build in U.S. commercial stockpiles of crude oil to a four-week high of 429.7 million bbl that was double the API-reported 1.1 million bbl weekly increase. In another contrast with the two reports, EIA reported crude oil stocks at the Cushing delivery hub in Oklahoma increased 500,000 bbl, while API late Tuesday said Cushing stocks were drawn down 930,000 bbl.

The oil markets are in seasonal transition, with refiners still conducting spring maintenance that will last for the next few weeks. That work was reflected in the EIA data, with the Beltway statisticians showing U.S. refinery utilization dropping 1.6% during the week reviewed to a 90.8% six-week low. U.S. refiners processed 328,000 bpd less crude during the week reviewed while imports surged 539,000 bpd to 8.469 million bpd.

Rounding out the bearish data points, EIA reported U.S. crude production increased 48,000 bpd last week to a fresh record high at 10.586 million bpd.

The market focused on the EIA data Wednesday after coming under pressure Tuesday from potential movement in U.S. President Donald Trump's threat to withdraw from the 2015 Iranian nuclear accord at the May 12 certification deadline. That movement was in response to a new plan to the Iranian issue offered by French President Emmanuel Macron during his state visit to the White House Tuesday.

NYMEX June West Texas Intermediate futures reversed off a one-week low of $67.11 bbl to settle up 35cts at $68.05 bbl, with the ICE June Brent contract ending the session up 14cts at $74.00 bbl. NYMEX May ULSD futures reversed off a $2.1159 gallon two-day low to settle 0.84cts higher at $2.1360 gallon. NYMEX May RBOB futures settled down 0.52cts at $2.0897 gallon, paring a decline to a $2.0694 three-day low.

Brian L. Milne can be reached at brian.milne@dtn.com

(BE)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.