Oil Ends Mixed on Supply Data

OLD BRIDGE, N.J. (DTN) -- New York Mercantile Exchange oil futures and Brent crude oil on the Intercontinental Exchange closed mixed Wednesday in a choppy session, as multiple government reports showed growing crude oil and gasoline inventories and a decision by the Federal Reserve to leave a key interest rate unchanged until at least its next meeting in June.

The mixed close follows mixed data from the Energy Information Administration, with the Washington, D.C.-based agency reporting a larger-than-expected build in commercial crude supply, unexpected build in gasoline stocks, and a greater-than-anticipated drawdown from distillate fuel inventory.

EIA reported U.S. commercial crude stocks rose 6.2 million bbl during the week-ended April 27, and said domestic crude production increased 33,000 bpd to a fresh record high of 10.619 million bpd, in sight of EIA's U.S. crude output estimate for 10.7 million bpd this year.

While bearish, the supply build came during seasonal refinery maintenance, as refinery crude inputs eased for the fourth consecutive week, down 60,000 bpd to a 16.561 million bpd seven-week low. On the bullish side of the equation, U.S. crude exports remained strong at 2.148 million bpd during the week, though 183,000 bpd less than week prior's record high. Exports last week were the third highest on record.

Despite the weekly supply build, NYMEX June West Texas Intermediate crude traded mostly higher in the session, reflecting strong demand amid trimmed international production, analyst say, settling $0.68 higher at $67.93 bbl. The higher settlement followed a test of initial retracement support at $66.85 with a $66.92 low.

ICE July Brent crude oil settled $0.23 higher at $73.36 bbl on the session, narrowing its premium with front month WTI to a $5.39 bbl two-week low.

NYMEX June RBOB settled down $0.0078 at $2.0798 gallon, paring a decline to a two-week spot low at $2.0564, on an unexpected 1.2 million bbl increase to 238.0 million bbl in domestic gasoline stocks during the week-ended April 27.

NYMEX June ULSD futures settled up $0.0218 at $2.1215 gallon following inside trade, with the diesel contract boosted by a larger-than-expected 3.9 million bbl supply drawdown that lowered stocks to a 118.8 million bbl 41-month low last week.

The U.S. dollar rallied to a better-than four-month high, boosted late afternoon by expectations inflation pressure would prompt the Federal Reserve to hike the federal funds rate, the benchmark in setting interest rates. The Federal Open Market Committee held the key borrowing rate unchanged at a 1.75% decade high following its two-day meeting that wrapped up Wednesday afternoon, although the market projects a rate hike at its June meeting.

Brian Whary can be reached at brian.whary@dtn.com