Oil Futures Settle Mixed on Supply Data

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled mixed this afternoon with crude and ULSD reversing lower from overnight gains while the RBOB contract posted moderate gains after the Energy Information Administration reported an unexpected build in U.S. crude stockpiles and stock draws for gasoline and middle distillates.

EIA's data for the week-ended Dec. 16 showed a 2.3 million barrel (bbl) crude stock build, missing an expected 2.0 million bbl stock draw. The build came despite a 200,000 bbl draw at the Cushing, Oklahoma, terminal for benchmark NYMEX WTI futures contract.

Distillate stockpiles fell by a more-than-expected 2.4 million bbl and gasoline inventories unexpectedly declined 1.3 million bbl for the week profiled, said the agency.

On consumption, EIA said demand rose 395,000 barrels per day (bpd) for gasoline, 519,000 bpd for distillate fuels and refinery crude inputs climbed 184,000 bpd. Market observers were mixed in their appraisal of the report, but they also noted low trade volume ahead of the Christmas holiday.

"Despite the headline crude build due to a surge in crude imports, a jump in product supplied to over 21 million bpd resulted in a total petroleum stock draw of 11.9 barrels and very bullish," said Kyle Cooper, an analyst at IAF Advisors in Houston.

"Overall, this is a mixed report, bearish for WTI but supportive for the products," said Tim Evans, a specialist at Citi Futures in New York.

NYMEX February West Texas Intermediate crude futures settled 81 cents lower at $52.49 per bbl, reversing off a $53.79 one-week high on the spot continuation chart. ICE February Brent crude futures dipped 89 cents to $54.46 bbl at settlement, near a three-day low of $54.32.

In products trade, NYMEX January ULSD futures declined 2.87 cents to a $1.6401 gallon settlement, off a $1.6373 three-day low. January RBOB futures settled 1.19 cents higher at $1.6055 gallon, moving off a $1.6133 seven-week high on the spot continuation chart.

The market continues to keep an eye open for news on overseas supply, with Libya saying today that it expects to boost production over the next few months.

Libya, a member of the Organization of the Petroleum Exporting Countries, is exempt from a Nov. 30 agreement by the cartel to cut production by 1.2 million bpd, effective Jan. 1, 2017. OPEC corralled the support of 11 non-OPEC producing nations who agreed to cut their output by 558,000 bpd next month for initial six months, renewable through December 2017.

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