Oil Futures End Mixed
NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled mixed Wednesday afternoon, with RBOB futures reversing from a three-week high to end little changed amid worry seasonal demand for gasoline remains sluggish year-over-year. The ULSD futures contract was the strongest segment of the oil complex.
Oil futures registered a modest rally earlier in the session after a report by the U.S. Energy Information Administration showed domestic petroleum inventories fell while demand improved during the week-ended May 12.
"The EIA had much different headlines numbers compared to the API, but overall the report was considered slightly bearish on the overall total inventory increase," said Houston-based oil analyst Kyle Cooper at IAF Advisors. "Total inventories were higher and that reduced the deficit to last year while expanding the surplus to the five-year average. For gasoline, estimated exports fell to the lowest level since Aug. 19, 2016."
The EIA data showed U.S. commercial crude oil supplies fell 1.8 million barrels (bbl) to 520.8 million bbl last week, less than an expected draw of 2.4 million bbl but contrasted with an 882,000 bbl gain reported late Tuesday by the American Petroleum Institute.
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Total crude supplies held an 11.0 million or 2.2% year-on-year surplus while 110.9 million bbl above the five-year average on May 12. U.S. crude production eased by 10,000 barrels per day (bpd) to 9.31 million bpd last week, but that decline was mostly due to lower output in Alaska.
The report showed stock draws of nearly 413,000 bbl and 1.9 million bbl for gasoline and distillates, respectively, versus expected draws of 1.4 million bbl each.
Refinery crude inputs, a proxy for demand, rose 363,000 bpd on the week as weekly runs jumped 1.9% to 93.4% of capacity, while demand for gasoline and distillate rose 44,000 bpd and 76,000 bpd, respectively, for the week reviewed. Year-on-year demand fell 3.1% for gasoline and 2.6% for distillate fuels.
NYMEX June ULSD futures rose 1.71 cents to $1.5335 gallon at settlement, off a three-week high on the spot continuation chart of $1.5464. June RBOB futures eased 0.16 cent to $1.6027 gallon settlement, off a $1.6197 fresh three-week spot high.
NYMEX June WTI crude oil futures settled 41 cents higher at $49.07 bbl, off a session high of $49.50. ICE July Brent crude futures rose 56 cents to $52.21 bbl settlement, testing resistance at $52.50 with a $52.61 intraday high.
A weaker U.S. dollar, which slumped to a six-month low, lent price support for WTI futures, although risk-off trade restrained the upside for oil futures.
"The dollar was supportive, but really the selloff in the stock market was bad for the oil market because people are concerned the political problems in Washington will make it difficult for President Trump to get his [pro-growth] agenda done," said analyst Phil Flynn at Price Futures.
The Dow Jones Industrial Average tumbled more than 300 points Wednesday, the largest one-day loss in the DJIA since September 2016.
George Orwel can be reached at george.orwel@dtn.com
(CZ)
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