Oil Retreats on Bearish U.S. Oil Data
NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled lower Wednesday afternoon after coming under selling pressure from stalled Greek debt talks and federal data showing a build-up in product supplies and higher crude oil production in the United States.
The U.S. Energy Information Administration detailed a surprise rise in gasoline stockpiles, up 680,000 bbl for the week-ended June 19 versus an expected draw of 300,000 bbl. Distillate supplies increased 1.84 million bbl for the week, EIA reported, versus an expected build of 200,000 bbl.
Demand for distillate fuels plunged 509,000 bpd to 3.6 million bpd for the week reviewed.
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EIA also reported a 4.9 million bbl weekly crude oil stock draw, the eighth consecutive weekly stock draw and more than double an expected decline of 2.0 million bbl. However, the report also said domestic crude oil production rose 20,000 bpd to 9.6 million bpd last week, up 1.16 million bpd year on year.
In Brussels, a meeting of euro-group finance ministers ended without a deal after Greek Prime Minister Alexis Tsipras rejected a proposal by creditors to break the impasse.
Another meeting is scheduled for tonight but both sides are already blaming each other. Germany downplayed any chance of a deal saying the two sides are still far apart, prompting fears of a knock-on effect on the regional economy if Greece defaults on its debt.
As a result, the NYMEX August WTI contract settled 74 cents lower at $60.27 bbl, reversing off a two-week spot high of $61.57. ICE August Brent futures settled 98 cents lower at $63.49 bbl, retreating from a one-week spot high of $65.05, with the Brent premium over WTI shrinking 24 cents to $3.20 bbl at the close.
In products trade, the NYMEX July ULSD futures contract tumbled 3.51 cents to a $1.8761 gallon settlement, reversing off a four-day high of $1.9304. NYMEX July RBOB futures settled 2.11 cents lower at $2.0555 gallon, moving off a three-day high at $2.1092.
The oil complex was choppy throughout the session as the market reacted to headline news from the Greek debt talks in Brussels. Athens and its creditors have agreed upon a broader framework of a reform program, but differ on details regarding whether the reforms should include more tax hikes or spending cuts.
Traders also kept a watchful eye on discouraging economic data. The Bureau of Economic Analysis confirmed the U.S. economy shrank during the first three months of the year but not as much as initially thought, saying the Gross Domestic Product fell 0.2% on annualized rate compared with the second estimate that showed a 0.7% contraction.
In Europe, the Ifo index showed confidence on the German economy fell to a four-month low this month.
George Orwel can be reached at george.orwel@telventdtn.com
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