RBOB Ends at One-Week High

NEW YORK (DTN) -- RBOB futures led New York Mercantile Exchange spot-month oil futures higher Wednesday afternoon, with RBOB settling at a one-week high on the back of a report by the Energy Information Administration. The report showed bigger-than-expected stock draws of 6.3 million bbl for gasoline and 4.4 million bbl for distillates alongside higher demand for gasoline during the week-ended March 9.

"The overall [petroleum stock] draw of 4.5 million barrels was supportive despite the large crude build," said analyst Kyle Cooper at IAF Advisors in Houston. "However, gasoline had a huge draw along with a large distillate draw. Thus, the report was from an inventory perspective very bullish for cracks." The EIA's Weekly Petroleum Status Report showed implied demand for gasoline soared 366,000 bpd to 9.64 million bpd for the week, while distillates demand fell 94,000 bpd to 3.832 million bpd versus the week prior.

The agency reported a more-than-expected 5.0 million bbl jump in total crude oil inventories to 430.9 million bbl last week, while down 97.3 million bbl or 18.4% from a year ago. Crude refinery inputs increased 432,000 bpd last week to average 16.4 million bpd, as refineries operated at 90.0% of their operable capacity, up from 88.0% the previous week.

At the Cushing supply depot in Oklahoma, the delivery point for West Texas Intermediate futures, crude supply rose for the first time in 12 weeks, up 338,000 bbl to 28.518 million bbl.

The EIA also reported domestic crude oil production rose again last week, up 12,000 bpd to a fresh record high of 10.381 million bpd in the week-ended March 9, up 1.272 million bpd year-on-year. "Based on Q4 E&P company reports, oil production will continue growing at a solid pace," Cooper added. "The overall draw was supportive along with refined products data. The output data should be concerning to a bullish view."

NYMEX April RBOB futures settled 3.80cts higher at $1.9243 gallon, near a one-week intraday high of $1.9260. The April ULSD futures contract climbed 1.32cts to $1.8871 gallon, off a near one-week high of $1.8962.

NYMEX April West Texas Intermediate crude oil futures settled 25cts higher at $60.96 bbl, having traded to a three-day low of $60.11. Intercontinental Exchange May Brent crude settled 25cts higher at $64.89 bbl.

Earlier, the Organization of the Petroleum Exporting Countries issued its monthly report that showed total production by its 14 members declined by 77,000 bpd to 32.19 million bpd in February. The Monthly Oil Market Report also revised up non-OPEC oil supply for 2018 by 280,000 bpd from the month prior forecast, representing year-on-year growth of 1.66 million bpd to 59.53 million bpd.

The U.S. liquids supply forecast for 2018 was revised up 160,000 bpd to show annual growth of 1.46 million bpd year-on-year on the back of higher-than-expected crude oil output, adjusted up 110,000 bpd mainly from the major shale plays, the OPEC report added.

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