DTN Oil Update

Maria Eugenia Garcia
DTN Energy Editor

SECAUCUS, N.J. (DTN) -- Crude oil benchmark futures showed mixed fortunes on Wednesday despite federal data showed U.S. commercial crude inventories declined for a third consecutive week.

In contrast, ultra-low sulfur diesel (ULSD) futures came under pressure after the U.S. Department of Energy (DOE) said Wednesday it would release 315,000 barrels (bbl) of heating oil from emergency reserves to help lower middle-distillate prices. The supply will be provided as loans from the Northeast Home Heating Oil Reserve, which holds about 1 million bbl of ULSD, and the release is expected to be completed by Nov. 13, the DOE said.

Separately, Russia is scheduled to send its first diesel shipment to the United States on Thursday under a White House sanctions waiver, Russian media reported. A 40,000-metric-ton ULSD cargo, equivalent to 300,000 bbl, is expected to depart a Baltic export terminal for the U.S. East Coast. The shipment is the first tranche of up to 4.8 million metric tons authorized by the U.S. Treasury through April 2027.

With this measure, the White House aims to lower domestic fuel prices ahead of peak winter heating demand. However, analysts cautioned that initial deliveries to PADD 1 would be too small to ease the region's supply tightness.

Upstream, the Energy Information Administration (EIA) reported U.S. commercial crude oil inventories declined for a third consecutive week during the week ended October 16, while gasoline stocks reversed the previous week's build and distillate fuel supplies rebounded from a four-month low

Commercial crude inventories fell 3.1 million bbl to 412.5 million bbl after declining 8.6 million bbl the prior week. The draw was smaller than the 4.93 million bbl decrease reported by the American Petroleum Institute a day earlier.

Crude oil imports fell by 291,000 bpd to 5.758 million bpd, while exports dropped by 1.128 million bpd to 3.442 million bpd, according to EIA data.

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