Oil Futures Lower Following EIA Data

NEW YORK (DTN) -- New York Mercantile Exchange oil futures were again trading lower after a brief move higher midmorning following the release of the Energy Information Administration's weekly oil supply and demand data.

Analysts said the move higher came as traders looked beyond EIA's bearish weekly oil supply report and focused instead on aspects of the EIA report deemed bullish, such as the falling crude imports that reflect the impact of the production cuts by the Organization of Petroleum Exporting Countries.

EIA data shows U.S. crude oil imports averaged 8.5 million bpd during the week-ended Feb. 10, a drop of 881,000 bbl from the previous week.

"The crude imports were down big and now the market is thinking they'll continue to come down as less OPEC supply starts to show up in the United States," said analyst Phil Flynn at Price Futures.

The agency reported domestic crude oil supply spiked 9.5 million bbl during the week-ended Feb. 10 more than twice the expected increase of 4 million bbl and close to the API's reported 9.9 million bbl crude stock increase.

At the Cushing terminal in Oklahoma, the delivery location for NYMEX West Texas intermediate crude futures, crude oil supply declined by 700,000 bbl, according to EIA, more than the expected draw of 200,000 bbl but below the API reported 1.27 million bbl draw.

At 11:30 AM ET, NYMEX March WTI futures were down 15cts at $53.05 bbl and the IntercontinentalExchange April Brent crude futures contract eased 16cts to

$55.81 bbl. NYMEX March RBOB futures fell 0.34cts to $1.5433 gallon and the NYMEX March ULSD contract edged down 0.58cts to $1.6324 gallon

EIA detailed an increase of 2.8 million bbl in gasoline supply, more than the API's reporting of a 717,000 bbl stock build for the fuel while a survey of analysts had projected a draw of 700,000 bbl. The federal agency also said middle distillate fuel inventories declined by about 689,000 bbl for the week reviewed, less than a projected draw of 1.2 million bbl while API reported a build of 1.5 million bbl.

The crude stock build was accompanied by a decline in refinery crude inputs, which is a proxy for demand. The EIA data shows crude inputs down 435,000 bpd for the week reviewed while implied demand for gasoline slid 508,000 bpd and implied demand for distillates declined 57,000 bpd.

Gasoline exports were down sharply, falling 347,000 bpd last week that contributed to the drop in implied demand. The decline is likely due to fewer exports to Mexico after the government there ended price subsidies in some parts of the country at the start of the year. U.S. gasoline exports to Mexico increased in 2016 on rising demand and limited refining capacity to meet that demand.