Oil Futures Settle Mixed Wednesday

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled mixed Wednesday afternoon with West Texas Intermediate crude and ULSD futures posting moderate gains after the Energy Information Administration reported crude oil and refined products declined last week.

September NYMEX RBOB futures bucked the trend, settling lower despite EIA data showing implied gasoline surged to a record high during the week-ended July 28.

"The market sees high refinery utilization supporting crude, but they are worried those crude will be turned into gasoline," said Houston-based analyst Andy Lipow. "There is adequate gasoline inventory and Labor Day is only four to five weeks away."

NYMEX September WTI crude futures settled 43 cents higher at $49.59 per barrel (bbl). The October Brent crude oil futures on the IntercontinentalExchange settled 58 cents higher at $52.36 bbl. September ULSD futures rallied 1.75 cents to settle at $1.6588 gallon and September RBOB futures eased 1.65 cents to $1.6448 gallon.

The EIA's report for the week-ended July 28 showed crude stockpiles fell 1.5 million bbl to a 481.9 million bbl seven-month low. Domestic crude oil production rose 20,000 bpd last week to a 9.43 million bpd fresh two-year high, while up 970,000 bpd versus a year ago.

The report showed gasoline stockpiles declined a more-than-expected 2.5 million bbl, while middle distillate fuel supply eased by a less-than-expected 150,000 bbl last week.

EIA showed refinery crude inputs, a proxy for demand, rose 123,000 barrels per day (bpd) to 17.4 million bpd. Implied demand for gasoline increased 21,000 bpd for the week to a record high 9.842 million bpd, 0.9% higher than a year ago. Implied demand for distillate fuels fell 236,000 bpd to 4.14 million bpd, but 15% higher than a year ago.

"This was a bullish report," said David Thompson, executive vice president at Powerhouse brokerage in Washington, D.C.

The weekly EIA data follows surveys from Bloomberg and Reuters earlier this week that found production by the Organization of the Petroleum Exporting Countries increased in July despite agreed to production cuts by members. Bloomberg showed OPEC crude production increased 210,000 bpd to 32.87 million bpd in July while Reuters showed output by the oil cartel rose 90,000 bpd to a 2017 high of 33.0 million bpd in July, in part because Libyan output rose 180,000 bpd during the month to 1.025 million bpd.

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