CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest delivery made modest price adjustments following the delayed 11 a.m. ET release of weekly oil statistics from the Energy Information Administration, with bearish crude data offset by bullish data points for oil products.
Missed market consensus is likely to maintain its trend in coming weeks, as the EIA continues to keep market watchers off balance regarding weekly data on crude, with EIA reporting a massive 10.3 million barrels (bbl) build in U.S. commercial crude stocks for the week-ended Nov. 9 that was more than four times higher than expectations. The increase was the eighth straight, with the large build pushing inventory to an 11-month high at 442.1 million bbl. The builds are also on trend to erase a year-on-year supply deficit while more than 20 million bbl above the five-year average.
Crude production increased 100,000 barrels per day (bpd) during the week profiled to a fresh record high at 11.7 million bpd, up 2.055 million bpd year-on-year, while averaging 10.72 million bpd in 2018 through Nov. 9, up 1.452 million bpd or 15.7% against the comparable year-ago period.
While upstream data is bearish, downstream statistics underpinned upside strength, with EIA reporting total demand for U.S. oil products surged 2.001 million bpd to a record high at 22.387 million bpd. Cumulatively through Nov. 9, U.S. oil products supplied to market have averaged 20.682 million bpd, up 572,000 bpd or 2.8% against the corresponding timeline in 2017.
All oil products increased during the week profiled, with distillate demand up 315,000 bpd to 4.633 million bpd, the second highest weekly demand rate of 2018, with the previous high reached during the second week of January. Demand for distillates averaged 4.346 million bpd during the four-week period ended Nov. 9, up 308,000 bpd or 7.6% against the comparable year-ago period.
The strong demand pull by the primary wholesale market supports data showing a robust U.S. economy, while Federal Reserve Chairman Jerome Powell Thursday called the U.S. economy "solid," while facing headwinds from slowing world economic growth. The International Energy Agency on Wednesday disputed market talk that slowing world economic growth would drag global oil demand lower, saying lower oil prices would offset the slowdown.
The market shrugged at the EIA data, with Nymex December West Texas Intermediate up $0.55 at $56.80 bbl midday and January delivery holding a roughly $0.20 premium to the expiring contract. Nymex December ULSD futures were down 1.5 cents near $2.0805 gallon, and December RBOB futures were up 1.15 cents near $1.5715 gallon.
Brian L. Milne can be reached at firstname.lastname@example.org
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