Oil Futures End Mixed

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled mixed Wednesday afternoon with West Texas Intermediate and Brent crude on the Intercontinental Exchange settling at three-year highs after the Energy Information Administration reported a draw in U.S. crude oil stockpiles last week.

NYMEX ULSD futures were lifted by higher demand for distillates amid ongoing frigid winter weather in the Northeast, while the RBOB futures contract settled down amid higher gasoline supply, reversing from a nearly 4-1/2 month high of $1.8513 gallon.

The EIA reported crude inventories declined for the eighth consecutive week in the week ended Jan. 5, and by a more-than-expected 4.9 million bbl that lowered stocks to a 2-1/2 year low of 419.5 million bbl, while down 63.6 million bbl or 13.2% versus a year ago and stock draw.

The stock draw reported by the agency fell short of the 11.2 million bbl decline reported on Tuesday by the American Petroleum Institute, while well above a 4.75 million bbl draw expected by the market.

"Although the EIA crude draw was less than half the reported API draw, it was a still a substantial ... Overall, this was considered a bullish report while very bearish for cracks," said analyst Kyle Cooper at IAF Advisors in Houston.

The report showed U.S. crude oil production fell 290,000 bpd to 9.492 million bbl, down from a 47-year high reached in mid-December at 9.789 million bpd. Cooper said the decline in crude output was more than expected, as cold weather restricted production operations.

U.S. refineries also processed less crude to start 2018, with crude oil inputs down 285,000 bpd to 17.323 million bpd while the refinery run rate fell 1.4% from a 12-1/2 year high to 95.3% of operable capacity.

On products, the EIA reported gasoline stockpiles surged 4.1 million bbl and distillate supplies added 4.3 million bbl last week, climbing for the second straight week, while implied demand rose 164,000 bpd for gasoline and 67,000 bpd for distillates.

NYMEX February WTI futures ended 61cts higher at $63.57 bbl and at the highest settlement since Dec. 9, 2014 when the spot month contract ended the session at $63.92 bbl.

March Brent crude oil futures on the ICE platform settled up 38cts at $69.20 bbl, the highest settlement since Dec. 4, 2014 when it ended at $69.64.

NYMEX February ULSD futures climbed 1.45cts to a $2.0807 gallon settlement and near a four-day high of $2.0844 while holding below a $2.0906 nearly three-year high on the spot continuation chart traded during the first business day of 2018. February RBOB futures eased 0.35cts from a more than four-month high on the spot continuation chart to a $1.8327 gallon settlement.

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