WTI Hits 1-Week Low on EIA Data

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures moved lower after the Energy Information Administration released data that showed a build in crude oil inventories and higher crude production in the United States for the week-ended March 23, with the RBOB contract initially supported by a better than expected gasoline stock draw.

"The report is supportive but also suggests a risk," said analyst Kyle Cooper at IAF Advisors. "Gasoline demand is good but also production is high, so we need exports to continue being strong to prevent the U.S. market from getting flooded with supply."

NYMEX May West Texas Intermediate crude traded at a $64.15 bbl one-week low as the data rolled out from the EIA, while down $1.00 at $64.25 bbl at last look. May Brent crude on the Intercontinental Exchange fell 75cts to near $69.30 bbl, with the June contract at a roughly 80cts discount to May delivery.

NYMEX April ULSD futures slumped by about 1.0cts to near $2.0115 gallon, with the May contract at near parity. April RBOB futures initially advanced on the data, but has since reversed lower, down 0.7cts at $2.065 gallon, with the May contract holding a roughly 0.75cts premium to the expiring contract.

The EIA report detailed a 1.6 million bbl build in commercial crude oil stockpiles to 429.9 million bbl. Stocks at Cushing in Oklahoma rose 1.8 million bbl to 31.2 million bbl, with Cushing serving as the delivery location for WTI futures contract. This is the third straight stock build at Cushing following 11 consecutive weekly draws.

The report showed domestic crude oil production accelerated to a 10.433 million bpd fresh record high last week, up 26,000 bpd on the week and 1.286 million bpd higher than a year ago. Gasoline stocks were drawn down 3.5 million bbl, more than an expected 2.25 million bbl decline, while distillate fuel supplies fell 2.1 million bbl last week to 129.0 million bbl, below expectations.

The agency reported an 18,000 bpd increase in refinery crude inputs as runs jumped 0.6% to 92.3% of operable capacity, while gasoline demand declined by 116,000 bpd and distillates demand spiked 458,000 bpd for the week reviewed.

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