Oil Futures Mixed After Supply Data

NEW YORK (DTN) -- New York Mercantile Exchange oil futures ended mixed Wednesday afternoon after the Energy Information Administration reported a bigger-than-expected stock build for crude oil while refined products were drawn down within market projected ranges.

Spot-month West Texas Intermediate posted sizable losses, settling at a near three-week low, while spot-month RBOB and ULSD futures were little changed at the close of regular trade after shaking off early losses and eking fractional gains.

The fact that product stock draws were less bearish versus forecast for last week and demand for gasoline and distillates increased boosted products futures at the close, while the WTI contract's downside was limited by no change in U.S. crude oil production at 9.1 million bpd, analysts said.

NYMEX December West Texas Intermediate futures settled $1.09 lower at $45.20 per barrel (bbl), off a near three-week spot low of $44.86. The ICE December Brent crude futures contract slipped 86 cents to a $47.85 bbl settlement, off a $47.50 near three-week spot low.

In products trade, NYMEX November ULSD futures eked out a 0.13 cent gain to $1.45 gallon at settlement, off a $1.4295 seven-week spot low, and NYMEX November RBOB futures edged up 0.25 cent to a $1.2808 gallon settlement.

On Wall Street, the U.S. stock market was lower this afternoon while the dollar reversed higher after early weakness. A stronger dollar is bearish for oil futures.

EIA's data for the week-ended Oct. 16 showed domestic crude oil stocks posted an 8.0 million bbl build, more than twice the expected rise of 3.3 million bbl, and above the 7.05 million bbl increase reported late Tuesday by the American Petroleum Institute.

Crude stocks at the Cushing, Oklahoma, supply hub that also serves as the delivery point for the WTI contract declined 100,000 bbl, EIA said, compared with an increase of 22,000 bbl reported by API and market expectations for a 500,000 bbl build.

On products, EIA reported a stock draw of 1.5 million bbl for gasoline versus market expectations for a 1.7 million bbl decline, but twice the 694,000 bbl rise reported by API. EIA also reported a 2.6 million bbl drawdown in distillate stocks, equaling API data but above expectations for a 2.0 million bbl draw.

On implied demand, EIA reported a 20,000-barrel-per-day (bpd) increase for gasoline and a 201,000 bpd jump for distillates. Refinery crude inputs, a proxy for crude demand, rose 78,000 bpd for the week.

The sharp build in U.S. crude supply reported for last week comes against an already oversupplied market. More oil supply is expected next year from Iran while a meeting today between the Organization of Petroleum Exporting Countries and non-OPEC oil producers Russia and Mexico is not expected to lead to a cut in production.

George Orwel can be reached at george.orwel@dtn.com