Oil Mixed at Midday

NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved mixed with crude and ULSD higher while the RBOB contract angled slightly lower after the U.S. Energy Information Administration released a mixed report for last week showing domestic crude oil inventories were drawn down as expected while refined oil products missed expectations.

The upside for the West Texas Intermediate and ULSD contracts was boosted by data showing higher demand, but the gains were limited by a strengthening dollar, with the greenback at a four-month high.

The market is expected to stay volatile, with August WTI expiring at the close of regular trade this afternoon.

EIA's data detailed a 2.5 million bbl crude stock draw, matching forecast for the week-ended July 15, while gasoline stocks rose 911,000 bbl instead of an expected draw of 200,000 bbl. Distillate fuel stocks fell 214, 000 bbl versus an expected 1.5 million bbl increase.

At 10:50 AM ET, NYMEX August WTI crude oil futures gained 23cts to $44.88 bbl, reversing off a $43.69 nine-week low on the spot continuation chart, while the September WTI contract was up 26cts at $45.71 bbl.

September Brent on the IntercontinentalExchange was up 33cts at $46.99 bbl, reversing off a $45.90 better than one-week low.

In products trade, NYMEX August ULSD futures advanced 1.99cts to $1.4040 gallon while August RBOB futures fell 1.37cts to $1.3620 gallon, paring losses after trading earlier to near a better than four-month low on the spot continuation chart of $1.3381.

Late Tuesday, the American Petroleum Institute reported a draw of 2.3 million bbl for crude for the week, a build of 805,000 bbl for gasoline and a draw of 484,000 bbl for distillates.

The crude stock draw was the ninth straight weekly decline, although total crude stocks remain high for this time of the year, 55.6 million bbl or 12.0% above the comparable year-ago period.

The market has been pressured by an oversupply of refined products, as high rates of refinery runs have led to an accumulation of large stockpiles of refined oil products in recent weeks and gasoline stocks have not decreased, analysts said.

The dollar rose ahead of European Central Bank decision on interest rates tomorrow. The Federal Reserve and the Bank of Japan will meet next week.

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