Oil Pares Gains in Midday Trade

NEW YORK (DTN) -- Spot-month oil futures on the New York Mercantile Exchange pared gains after the Energy Information Administration released a mixed bag of statistics showing a better than expected crude stock draw and unexpected stock builds for refined oil products during the week-ended Dec. 15.

The EIA report detailed a 6.5 million bbl commercial crude stock draw down, surpassing an expected 5.25 million decline, as refinery runs climbed 0.7% to 94.1% and crude utilization increased 111,000 bpd to 17.1 million bpd during the week reviewed. This is the fifth straight weekly commercial crude stock draw reported by EIA, signaling a tightening domestic market.

However, the report also showed crude supply at Cushing supply depot in Oklahoma rose for the first time in six weeks, up by 754,000 bbl to 52.998 million bbl.

In addition, domestic crude oil production rose yet again, up 9,000 bpd to a fresh 46-year high of 9.789 million bpd and 1.003 million bpd higher than a year earlier.

The report also showed gasoline stockpiles increased by 1.2 million bbl and distillate fuel supply edged up about 769,000 bbl last week yet supply of the fuel remains 16.1% below a year ago. Those surveyed by DTN called for a gasoline supply draw of 1.25 million bbl and distillates draw of 1.4 million bbl.

Implied demand for gasoline was up 335,000 bpd while distillates demand fell 454,000 bpd for the week.

At 11:00 AM ET, NYMEX February West Texas Intermediate crude oil futures traded 23cts higher at $57.79 bbl, off a one-week high of $57.93. The Intercontinental Exchange February Brent contract was 35cts higher at $64.15 bbl, off a one-week high of $64.21.

NYMEX January ULSD futures traded little changed, up 0.09cts to $1.9408 gallon, while January RBOB futures gained 2.71cts to $1.7237 gallon.

Earlier, the market was supported by a bullish outlook from Goldman Sachs bank, the American Petroleum Institute mixed supply report on Tuesday and the continued outage of Forties crude oil pipeline system in the North Sea.

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