Oil Futures Lower on EIA, OPEC Reports

NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled lower Thursday after the Energy Information Administration said U.S. crude oil stocks rose by a more-than-expected 4.2 million barrels (bbl) last week, the seventh straight weekly crude stock build despite improved demand for crude oil and gasoline.

The EIA report was particularly bearish on two fronts: it showed a surprise stock build for nationwide distillates and crude oil stocks at the Cushing supply hub in Oklahoma.

NYMEX December WTI futures settled $1.18 lower at $41.75 bbl, off a 2-1/2-month spot low of $41.63 bbl. ICE December Brent futures slumped $1.75 to $44.06 bbl, near a 2-1/2-month low of $44.01, as traders continued to unwind the December contract ahead of its expiration tomorrow, and the January contract closed down $1.42 at $45.19.

NYMEX December ULSD futures tumbled 4.11 cents to $1.4066 gallon, near a 2-1/2-month spot low of $1.4057 gallon, December RBOB futures plummeted 5.63 cents to $1.2731 gallon, near a two-week spot low of $1.2714.

The EIA report detailed a 4.2 million bbl crude stock increase, more than five times the 800,000 bbl draw analysts anticipated. The build was below the 6.2 million bbl hike reported Tuesday by the American Petroleum Institute, however.

Products data were mixed, showing implied demand for gasoline up 204,000 bpd while demand for distillate grades was down 193,000 bpd for the week. Crude oil refinery inputs, a proxy for crude demand, rose 302,000 bpd during the week profiled.

The EIA report also detailed a surprise 2.2 million bbl increase for crude stocks in Cushing, Oklahoma. The market expected a draw of 500,000 bbl at Cushing while API reported a 2.5 million bbl build.

U.S. crude oil production also rose 30,000 bpd to 9.19 million bbl that is up 120,000 bpd year-on-year, the report showed.

For products, EIA reported a 2.1 million bbl stock draw for gasoline versus an expected 300,000 bbl draw, but lower than API's 3.2 million bbl draw. In addition, EIA data shows a 352,000 bbl rise for distillate stocks, missing an expected draw of 1.3 million bbl and API's 500,000 bbl draw.

The oil market was already under pressure following the release of a bearish report by the Organization of Petroleum Exporting Countries. OPEC maintained its forecast from a month ago saying the global oil demand growth rate would slow next year due to economic weakness in emerging countries, while non-OPEC supply would also decline.

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