Oil Futures End Mixed Thursday

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled shallowly mixed Thursday afternoon with West Texas Intermediate crude down from Wednesday's 18-month high settlement while the ULSD and RBOB contracts edged higher to fresh multi-month highs after the U.S. Energy Information Administration reported a surprise build in crude oil inventories and stock draws for refined products.

The report for the week-ended Dec. 23 showed a 613,000 barrel (bbl) crude oil stock build to 486.1 million bbl, a 6.8% year-over-year supply surplus, with Cushing supply hub in Oklahoma, crude inventories adding about 100,000 bbl to 66.4 million bbl.

A market survey Wednesday estimated a crude draw of 2.2 million bbl while the American Petroleum Institute late Wednesday reported a 4.2 million bbl increase in domestic crude supply. The survey also projected a 500,000 bbl stock decline at Cushing, the delivery location for NYMEX WTI futures.

EIA reported stock draws of 1.6 million bbl for gasoline and 1.9 million bbl for distillates, missing expectations for a 200,000 bbl distillate draw and for gasoline stockpiles to remain unchanged. API showed draws of 2.8 million bbl and 1.7 million bbl for gasoline and distillates, respectively.

Total commercial petroleum inventories tumbled 12.9 million bbl last week, while total products supplied -- a proxy for demand, averaged 19.9 million barrels per day (bpd) over the most recent four-week period, down 1.3% from the same period last year.

The futures complex has been supported by bullish sentiment driven by recent agreements by members and non-members of the Organization of the Petroleum Exporting Countries to cut production by 1.758 million bpd effective Jan. 1 through June 30, 2017.

In addition, strong U.S. economic growth is expected to boost energy demand, with the positive outlook underscored by the Conference Board's report this week showing U.S. consumer confidence index rose this month to the highest level since August 2001.

That bullish reading on consumer confidence followed data from the Bureau of Economic Analysis a week ago showing U.S. gross domestic product grew at a 3.5% annualized rate, the quickest quarterly expansion rate in two years.

At settlement, NYMEX February West Texas Intermediate crude futures eased 29 cents to $53.77 per bbl. February Brent on IntercontinentalExchange settled down 8 cents to $56.14 bbl.

NYMEX January ULSD futures were up 0.94 cent to $1.7037 gallon to a fresh 17-month high settlement, trimming an advance to a $1.7170 18-month intraday high on the spot continuation chart, with the February contract up 0.29 cent at $1.7200 gallon.

January RBOB futures settled up 0.74 cent to $1.6820 gallon at a fresh better than 16-month settlement high, paring an advance to a 17-month intraday spot high of $1.7038, with the February contract up 0.41 cent at $1.6798 gallon.

NYMEX January oil products futures expire at Friday's close.

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