Oil Futures Settle Mixed Wednesday

NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled mixed with West Texas Intermediate crude and RBOB lower on concerns about rising crude supply and production, but ULSD futures shook off early losses and settled a tad higher, boosted by strong exports. "Refined products export demand was decent… product exports were back up, rising 1.5 million bpd for distillates and about 900,000 bpd for gasoline," said Houston-based Kyle Cooper at IAF Advisors.

"The distillates stock draw and higher refinery runs were supportive," added analyst Phil Flynn at Price Futures in Chicago.

The Energy Information Administration's oil report showed an unexpected crude stock build of 1.9 million bbl for the week-ended Nov. 10, but that figure trailed the 6.5 million bbl supply increase shown Tuesday by the American Petroleum Institute. The market expected to see a 3.25 million bbl draw.

WPSR showed gasoline stocks rose 893,000 bbl and distillate supplies fell 799,000 bbl last week. Total commercial petroleum inventories rose 2.8 million bbl last week.

"This is the first total petroleum inventory build since Sept. 8 [and] it came on the heels of higher crude imports and lower total petroleum demand," Cooper said. "Overall, a bearish report."

The EIA report showed U.S. crude oil production increased again last week, up 25,000 bpd to 9.645 million bpd, the highest production rate since May 1971.

On demand, refinery crude oil inputs, a proxy for demand, rose 334,000 bpd to a 16.639 million bpd near three-month high. But implied demand for gasoline tumbled 324,000 bpd for the week while falling 2.0% versus a year ago. Distillate fuel demand plunged by 457,000 bpd last week while rising 2.2% versus a year ago.

Earlier in the session, Bloomberg News reported that Russia is lukewarm to any plans to reach a decision at Nov. 30 meeting of the Organization of the Petroleum Exporting Countries to extend current output cuts by OPEC and 10 non-OPEC oil producers including Russia. Russia believes it's still too early to make that decision.

The oil futures complex was weighed down by the International Energy Agency's decision to cut its global oil demand forecast for 2017 and 2018.

December WTI crude futures settled down 37cts at $55.33 bbl and January Brent fell 34cts to $61.87 bbl on the Intercontinental Exchange, with the Brent/WTI arbitrage closing at $6.54 bbl. December ULSD futures settled up 0.17cts at $1.9087 gallon and December RBOB futures eased 2.24cts to $1.7388 gallon.

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