Oil Slumps After EIA Report

NEW YORK (DTN) -- Spot-month oil futures on the New York Mercantile Exchange moved lower in Wednesday midmorning trade after the U.S. Energy Information Administration reported that domestic crude oil production increased again last week, although the downside was curbed by data showing crude stocks were drawn down more than expected last week and refined product stocks were mixed.

The EIA's Weekly Petroleum Status Report for the week-ended Dec. 8 showed U.S. crude production increased 73,000 bpd to a 9.78 million bbl fresh 46-year high while 984,000 higher versus a year earlier.

The report showed total commercial crude stockpiles declined by 5.1 million bbl, surpassing an expected 4.0 million bbl stock draw but less than the 7.4 million bbl reported by the American Petroleum Institute. The report also showed gasoline stockpiles increased by 5.7 million bbl while distillate supply declined by 1.4 million bbl for the week reviewed.

On demand side, crude oil inputs declined 243,000 bpd, while implied demand for gasoline and distillates increased by 196,000 bpd and by 643,000 bpd, respectively, during the week reviewed. At 11:00 AM ET, NYMEX January West Texas Intermediate crude oil futures were 16cts lower at $56.98 bbl. ICE February Brent was 46cts lower at $62.88 bbl.

NYMEX January ULSD futures eased 1.33cts to $1.9203 gallon and January RBOB futures dropped 2.76cts to $1.67 gallon.

Earlier, the Organization of the Petroleum Exporting Countries released its Monthly Oil Market Report this morning that showed total OPEC-14 crude oil production averaged 32.45 million bpd in November, down 133,000 bpd over the previous month and the lowest in six months.

The OPEC report revised up expectations for non-OPEC supply for both this year and in 2018, driven by higher-than-previously projected U.S. production growth. U.S. crude production in 2018 is expected to grow by 720,000 bpd to average 9.96 million bpd.