Oil Lower in Midday Trade

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

CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest to delivery declined in reaction to weekly data from the Energy Information Administration showing an increase in commercial crude stocks in the United States while implied demand for products slid to a six-week low.

A 2.8 million barrel (bbl) increase in commercial crude stocks is the result of a 367,000 bpd drop in crude inputs at U.S. refineries to a 15.831 million bpd five-week low, with the decline chiefly at the Gulf Coast, where a March 17 fire at the Deer Park petrochemical facility in Texas prompted the U.S. Coast Guard to partially close the Houston Ship Channel. The closure of the important waterway delayed crude shipments to some refineries prompting cuts in their run rate.

Crude inputs for Gulf Coast PADD 3 declined by 294,000 barrels per day (bpd) to an 8.354 million bpd better-than 13-month low during the week ended March 22. Crude inputs along the West Coast PADD V also dropped, down 70,000 bpd to a 2.375 million bpd six-week low amid a rash of refinery disruptions in California.

Both crude imports and exports dropped during the profiled week, although net imports increased 114,000 bpd to 3.654 million bpd.

A 2.9 million bbl draw in gasoline stocks and 2.1 million bbl decline in distillate stocks during the week ended March 22 topped market estimates, but were below bullish statistics reported by the American Petroleum Institute late Tuesday showing a 3.47 million bbl drop in gasoline stocks and 4.28 million bbl draw from distillate inventory.

EIA also reported a 1.362 million bpd drop in total product supplied to market to 20.13 million bpd. Implied demand cumulatively in 2019 has averaged 20.796 million bpd, up 169,000 bpd or 0.8% against the comparable year-ago period.

In late morning trading, Nymex April West Texas Intermediate futures were down $0.25 near $59.70 bbl, while Intercontinental Exchange May crude was flat near $68 bbl. Nymex April ULSD futures were flat at $1.99 gallon, trading at a roughly 10-cent discount to the May contract ahead of Friday afternoon's expiration. Nymex April RBOB futures were down 3.75 cents near $1.9180 gallon ahead of expiration Friday afternoon, narrowing a premium to the May contract to about 3 cents.

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


Brian Milne