Oil Futures Mixed on Bearish EIA Data

NEW YORK (DTN) -- Spot-month New York Mercantile Exchange oil futures settled mixed this afternoon with RBOB reversing off a 19-month high to close a tad lower after the Energy Information Administration reported an unexpected build in domestic crude supply, with oil product stocks drawn down less than expected and gasoline demand declining during the last week of March.

"Compared to the American Petroleum Institute's data, this [EIA] was a bearish report," said analyst Kyle Cooper at IAF Advisors. "Total petroleum stocks were higher and even the 3 headline numbers were a build compared to the large API draw."

The report showed a 1.6 million barrel (bbl) stock build for crude to a fresh record high at 535.5 million bbl, with crude oil supplies in Cushing, the delivery point for NYMEX West Texas Intermediate crude futures, up 1.4 million bbl.

The market expected total crude stocks to have declined by 2.0 million bbl, with Cushing crude stocks seen down 500,000 bbl. The American Petroleum Institute late Tuesday showed a stock draw of 1.8 million bbl nationwide and a Cushing stock build of 1.34 million bbl.

The report also showed domestic crude production rising 52,000 barrels per day (bpd) to a 9.199 million bbl 14-month high. Gasoline stocks fell 618,000 bbl for the week, falling short of an expected 2.0 million bbl draw, as demand for the fuel tumbled 279,000 bbl. Distillate supplies fell 536,000 bbl last week versus an expected draw of 2.0 million bbl.

On the bullish side, the EIA reported crude imports fell 374,000 bpd to 7.85 million bpd last week, with refinery runs surging 1.5% to 90.8% and refinery crude inputs up 203,000 bpd to 16.429 million bpd.

Lower U.S. crude imports suggest the output cuts of 1.8 million bpd being implemented by the Organization of the Petroleum Exporting Countries and 11 non-OPEC countries are starting to reduce global inventories, said analysts.

OPEC Secretary General Mohammad Barkindo on Sunday said the global oil supply-demand balance is tightening after three months of output cuts. The cuts that started in January should continue through June, although discussions are underway to extend the quota scheme through December.

Also, Tuesday's outage at the 200,000 bpd North Sea Buzzard oilfield that contributes supply along with the Forties field for Brent crude was supportive for Brent futures.

May NYMEX WTI futures settled 12 cents higher at $51.15 bbl, pared from a $51.88 one-month high on the spot continuation chart. ICE June Brent futures were up 19 cents at a $54.36 bbl settlement, paring gains from a $55.09 one-month spot high.

NYMEX May ULSD futures held on to gains of 1.12 cents with a $1.6035 gallon settlement, pared from a one-month spot high of $1.6223. NYMEX May RBOB futures settled down 0.64 cent to $1.7153 gallon after trading at a 19-month high on the spot continuation chart of $1.7374.

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