CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest delivery were mixed in late morning trading following the midmorning release of weekly supply data from the Energy Information Administration showing bearish data for crude and gasoline and supportive statistics for distillates.
Nymex December West Texas Intermediate traded at a nearly eight-month low on the spot continuous chart after EIA reported a 400,000 barrels per day (bpd) jump in U.S. crude production to an 11.6 million bpd record high. The significant increase in the domestic production rate follows revelation by EIA on Oct. 31 that their monthly data in August was understated by 300,000 bpd, with output for said month at 11.3 million bpd. EIA publishes their monthly data with a two-month lag, with the monthly figures more accurate than the weekly data points.
The bearish production number was joined by the seventh consecutive weekly increase in commercial crude supply national and at the Cushing supply hub, the delivery located for Nymex WTI futures, with the large 5.8 million barrels (bbl) build pushing U.S. stocks to a nearly five-month high at 431.8 million bbl. A modest 200,000 bbl of crude was released from the Strategic Petroleum Reserve during the week profiled.
Gasoline stocks unexpectedly increased 1.9 million bbl to 228.0 million bbl during the week ended Nov. 2, widening its year-on-year surplus 5.1 million bbl to 18.5 million bbl or 8.8%. Implied gasoline demand slid 162,000 bpd to 9.099 million bpd four-week low, and slipped below the five-year average for the fifth time this year. During the four weeks ended Nov. 2, gasoline supplied to the primary market averaged 9.217 million bpd, down 135,000 bpd or 1.4% against the comparable year-ago period. The findings suggests high retail prices dampened demand in October.
A 3.5 million bbl draw in distillate fuel inventory was the seventh straight weekly decline, lowering supply to a 15-week low at 122.9 million bbl. Implied demand for distillate fuel averaged 236,000 bpd or 6.1% above year ago during the four weeks ended Nov. 2, EIA data shows.
Oil futures moved in line with the data, with Nymex December WTI futures paring a decline to $61.20 bbl late morning, trading down about $0.25 to $62.00 bbl.
Nymex December RBOB futures set a new low on the spot continuous chart for 2018 at $1.6475 gallon, with the previous low plumbed in mid-December 2017. In late morning trade, December RBOB futures were down nearly 4.0 cents at $1.6550 gallon.
Nymex December ULSD futures were up 4.0 cents near $2.2280. A forecast for below normal temperatures in the U.S. Northeast from Nov. 12 to Nov. 20 by the National Oceanic Atmospheric Administration's Climate Prediction Center has also spurred gains in ULSD futures.
Brian L. Milne can be reached at email@example.com
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