NEW YORK (DTN) -- New York Mercantile Exchange oil futures rallied in midmorning trade after the Energy Information Administration issued its weekly data showing a bigger-than-expected distillate stock draw amid rising demand for the fuel, with the complex briefly posting two-day highs across the board before paring gains.
Crude oil stockpiles rose more than expected however, and stocks of gasoline fell in line with expectations. Overall, the EIA's data was mixed but the optimistic market is cherry-picking bullish parts to bolster gains. The upside is limited.
At 10:50 AM ET, NYMEX May West Texas Intermediate crude oil futures rose $1.14 to $39.42 bbl, off a two-day high of $39.85. ICE May Brent gained $1.09 to $40.23 bbl, off a two-day high of $40.61.
NYMEX April ULSD futures surged 3.32cts to $1.1887 gallon, off a two-day high of $1.2012, while April RBOB futures edged up 0.33cts to $1.4571 gallon, off a two-day high of $1.4763.
Earlier, the oil complex was boosted by a weakening dollar following what were seen as dovish comments by U.S. Federal Reserve Chair Janet Yellen on raising interest rates in a speech Tuesday.
The EIA said nationwide commercial crude stockpiles rose 2.3 million bbl during the week-ended March 25, the seventh straight weekly gain, and above the market's estimate of a 1.7 million bbl stock build. The American Petroleum Institute reported a 2.6 million bbl stock build.
At the Cushing terminal in Oklahoma, the delivery point for NYMEX WTI crude, crude stocks fell 300,000 bbl, EIA said. API reported a decline of 319,000 bbl and the market expected a decline of 500,000 bbl.
The EIA also detailed a 2.5 million bbl stock draw for gasoline, in line with expectations while API reported a 1.9 million bbl stock draw for the fuel.
The EIA also reported a 1.1 million bbl stock decline for distillates, doubling expectations for a 500,000 bbl stock draw, while API reported a 95,000 bbl dip in inventory.
On demand, EIA reported refinery crude inputs increased 414,000 bpd to 16.234 million bpd, while implied gasoline demand fell 259,000 bpd and implied distillate demand surged 475,000 bpd for the week.
Aside from the EIA data, the market is also looking ahead to Friday's payroll report from the Bureau of Labor Statistics, and after private payroll firm ADP this morning estimated the economy added 200,000 jobs this month. The ADP data added optimism in the market.
© Copyright 2016 DTN/The Progressive Farmer. All rights reserved.