Oil Mixed Following EIA Report

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

CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest to delivery mostly reversed lower from a nascent Wednesday morning advance following the weekly release of U.S. oil statistics from the Energy Information Administration that showed domestic crude production reached a fresh record high.

EIA reported a 200,000 barrels per day (bpd) increase in U.S. crude production to 11.9 million bpd for the week-ended Jan. 11, 1.0 million bpd above the 2018 average. In the most recent four-week period, domestic crude output averaged 11.75 million bpd, 2.055 million bpd or 21.2% above the comparable year-ago period.

In its Short-term Energy Outlook released Tuesday, EIA projected U.S. crude production would average 12.1 million bpd this year and 12.9 million bpd in 2020, "with most of the growth coming from the Permian region of Texas and New Mexico."

U.S. commercial crude stocks were drawn down 2.7 million barrels (bbl) during the week profiled, more than the 560,000 bbl decline reported by the American Petroleum Institute Tuesday afternoon, pressing inventory to a 437.1 million bbl two-month low. The stock draw came despite a 343,000 bpd drop in crude inputs at U.S. refineries to a 17.223 million bpd two-month low, although exports jumped 901,000 bpd to a 2.966 million bpd three-week high.

Data was bearish for oil products, with gasoline stocks up substantially for a third consecutive week, with supply building 7.5 million bbl to a 255.6 million bbl 10-1/2 month high. Distillate stocks increased 3.0 million bbl that pushed inventory to a 143.0 million bbl one-year high.

Total commercial domestic stocks of crude and products increased 5.0 million bbl during the week profiled to a 1.2604 billion bbl three-month high.

Implied demand for distillate fuel surged 1.464 million bpd to a one-month high at 4.449 million bpd, although the increase was off a three-year low. During the four weeks ended Jan. 11, implied distillate demand is down 365,000 bpd or 8.9% to 3.712 million bpd.

Gasoline demand supplied to market declined 170,000 bpd to an 8.565 million bpd 11-month low. During the four weeks ended Jan. 11, implied gasoline demand is down 86,000 bpd or 1.0% to 8.818 million bpd against the year-ago period.

In late Wednesday morning trade, Nymex February West Texas Intermediate futures were down $0.35 near $51.75 bbl, with February RBOB futures 1.85cts lower near $1.3930 gallon. February ULSD futures were up 1.2cts near $1.8845 gallon.

The National Weather Service Climate Prediction Center forecasts below normal temperatures for the eastern United States through Feb. 8, lending upside support for ULSD futures.

Brian Milne can be reached at brian.milne@dtn.com

(CZ)

Brian Milne