Oil Up, Traders Shrug at Bearish Report

Brian L Milne
By  Brian L. Milne , DTN Refined Fuels Editor

CRANBURY, N.J. (DTN) -- Oil futures nearest delivery traded on the New York Mercantile Exchange added to gains late morning after a brief pause following the release of weekly supply statistics from the Energy Information Administration, with the report clashing with bullish components of the late Tuesday report released by the American Petroleum Institute.

EIA reported the second consecutive weekly draw in commercial crude stocks occurred during the week-ended Dec. 7, down 1.2 million barrels (bbl) to a 442.0 million bbl six-week low, and down 8.5 million bbl during the past two weeks. Yet, API reported a 10.181 million bbl decline for the first week in December.

After four consecutive weeks with record crude production at 11.7 million barrels per day (bpd), EIA reported a 100,000 bpd decline during the first week in December to 11.6 million bpd. On Tuesday, EIA projected U.S. crude production would average 12.1 million bpd in 2019, up from 10.9 million bpd this year and 9.4 million bpd in 2017.

A 2.1 million bbl build in gasoline stocks was in line with market expectations, but the API reported a 2.484 million bbl draw from the inventory of motor transportation fuel for the week profiled. U.S. gasoline exports reached a record high 1.311 million bpd during the first week of December, while imports increased 336,000 bpd from a 23-year low to a five-week high at 525,000 bpd.

As the year nears an end, gasoline supplied to market this year through Dec. 7 at 9.331 million bpd is up 57,000 bpd or 0.6% against the comparable year-ago period. During the most recent four weeks, implied gasoline demand was flat with year ago, down 4,000 bpd, at 9.072 million bpd.

A 1.5 million bbl draw in distillate inventory during the first week of December contrasted with expectations for a build and an API reported 712,000 bbl weekly increase. At 124.1 million bbl, distillate stocks are down 3.9 million bbl or 3.1% against year prior while widening its deficit against the five-year average 4.763 million bbl to 10.705 million bbl or 7.9%.

At 11:30 AM ET, Nymex January West Texas Intermediate futures were up $0.85 at $52.50 bbl, January ULSD futures were 3.35 cents higher near $1.8805 gallon, with the January RBOB contract gaining 2.25 cents to $1.4623 gallon.


Brian Milne