NYMEX Oil Futures End Higher

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled slightly higher Wednesday after a choppy session, with gains underpinned by technical support and higher demand for distillates, but the gains were curbed by soft gasoline demand and a stronger U.S. dollar.

After vacillating either side of their respective Tuesday settlement prices for most of Wednesday's session, the NYMEX made a last minute upside run on the back of the Energy Information Administration's data showing implied demand for distillates soared 589,000 bpd during the week ended April 28 to 4.256 million bpd.

Analysts also noted that total U.S. petroleum inventories fell further below last year while the surplus over the five-year average fell. Total U.S. petroleum demand rose to almost 19.9 million bpd, the highest since March 3.

"Refinery runs did slip from last week's record, but remain very high," said analyst Kyle Cooper at IAF Advisors in Houston. "The report was OK but the biggest bearish factor is that production was up again."

The EIA showed domestic crude stockpiles were drawn down by 930,000 bbl to 527.8 million bbl in the week ended April 28, up to a 3.1% year-over-year surplus. The market expected a draw of 2.75 million bbl.

Domestic crude production rose by 28,000 bpd to 9.293 million bpd last week, the highest in 20 months and 468,000 bpd higher on the year.

The EIA report also showed gasoline stockpiles increased by 191,000 bbl to 241.2 million bbl during the week versus an expected increase of 250,000 bbl, as implied demand for the fuel fell by 50,000 bpd to 9.156 million bpd.

Distillate supplies declined 562,000 bbl to 150.4 million bbl versus an expected increase of 1.25 million bbl, with implied demand soaring by 589,000 bpd to 4.256 million bpd.

The oil futures complex rose overnight on bullish oil data from the American Petroleum Institute before reversing lower Wednesday morning, and during market-at-close, the oil futures complex moved higher again.

Brian LaRose, an analyst at ICAP in Jersey City, N.J., said the market was focused on technical factors rather than on these oil supply data, pointing to support levels for spot-month West Texas Intermediate crude at $45, for ULSD at $1.415 and for RBOB at $1.50.

"The oil market is losing [downside] momentum, which is a precursor to bottoming out action," he said.

NYMEX June WTI crude oil futures settled 16cts higher at $47.82 bbl, reversing off a five-week spot low of $47.30. IntercontinentalExchange July Brent futures settled up 3cts at $50.79 bbl after inside trade.

NYMEX June ULSD futures settled 0.56cts at $1.4736 gallon, reversing off a five-month spot low of $1.4587. June RBOB futures settled up 2.02cts at $1.5338 gallon after an inside trading day.

The Federal Reserve left federal funds rates unchanged after a two-day policy meeting, but signaled it will stay on a path of gradual monetary tightening.

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