Oil Futures Lower on Weekly Supply Data

OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange were lower in early trading day today as market participants digest the effects of a larger-than-expected weekly crude stock build and an unexpected increase in gasoline stocks.

Near 9:00 AM ET, NYMEX June West Texas Intermediate futures were down $0.37 at $67.56 bbl, with ICE July Brent $0.64 lower at $72.72 bbl. NYMEX June RBOB futures were down $0.0156 at $2.0642 gallon with the June ULSD contract $0.0148 lower at $2.1067 gallon.

"The market is kind of sputtering on oil," said Phil Flynn, senior market analyst with Price Futures Group "There's not a lot of fresh news to drive us, so it's being driven by the flavor the day, be it a falling dollar or the supply situation. Basically, the lack of any compelling headline is causing oil to sell off a little bit."

The U.S. dollar softened from Wednesday's four-month high following the two-day Federal Open Market Committee, with central bank officials maintaining gradual monetary tightening. The Fed is expected to increase the federal funds rate, now at 1.75%, when they meet next in mid-June.

Wednesday's Energy Information Administration weekly report showed U.S. commercial crude stocks increased a more-than-expected 6.2 million bbl during the week-ended April 27, although 4.8 million bbl or 77.4% of the build was along the West Coast.

Gasoline stocks continued to build last week after a steep draw during the second week of April according to the EIA report, posting an unexpected 1.2 million bbl increase for the week-ended April 27. The build continues to pressure NYMEX RBOB futures after Wednesday's down day. The supply build follows slowing demand against year ago after strong year-on-year comparisons through the first quarter and early April.

Gasoline supplied to market averaged 9.09 million bpd during the week profiled compared with 9.156 million bpd during the same week in 2017, although cumulatively in 2018 through April 27 demand at 9.138 million bpd is up 251,000 bpd or 2.8% year-on-year.

Distillates were drawn down a more-than-expected 3.9 million bbl to 118.8 million bpd during the week-ended April 27, with inventory at a 41-month low, boosting the NYMEX ULSD contract more than 2.0cts gallon Wednesday, while giving most of that back in early trading.

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