Oil Mixed in Wednesday Morning Trade

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange oil futures and the Brent contract on the Intercontinental Exchange moved mixed Wednesday morning on reports of further disruptions in Venezuela crude exports, while West Texas Intermediate was pressured overnight by a build in U.S. commercial crude inventories reported late Tuesday by the American Petroleum Institute.

In midmorning trading, West Texas Intermediate May contract gained $0.15 at $60.09 per barrel (bbl), trading near a four-month high on the spot continuous chart, while ICE Brent May futures moved $0.34 up to $68.31. Nymex ULSD April contract advanced 0.46 cents to $1.9945 gallon, while RBOB April futures moved 2.43 cents lower to $1.9314 gallon, reversing from Tuesday's $1.9807 five-month spot high on continues price chart.

Several wire services reported Wednesday that Venezuela's main oil export port of Jose and four heavy crude upgraders were unable to resume operations following a massive power outage on Monday. The latest blackout occurred just 10 days after the first reported failure of the electrical grid, cutting off power from moving on multiple transmission lines at PDVSA's oil fields. According to Reuters, four heavy crude upgraders in Orinoco Belt, with cumulative capacity of 700,000 barrels per day (bpd), are currently paralyzed and at least one upgrader was unable to fully restart since the first blackout on March 7.

In addition to technical issues, Venezuela lost access to U.S. originated naphtha, which is used as a diluent for its extra heavy oil, with no readily available alternatives to replace it. According to Rystad Energy, Venezuela will run out of U.S. originated naphtha by the end of March.

Oil futures gains were capped Wednesday morning by a mixed report from American Petroleum Institute published Tuesday. API data showed U.S. commercial crude supplies increased 1.93 million bbl in the week ended March 22, while gasoline and distillate inventories posted steep draws. API reported gasoline inventories tumbled 3.47 million bbl, above calls for a draw of 2.5 million bbl, while distillate stocks plunged 4.28 million bbl, more than four times estimates for a decline of 1.0 million bbl.

Energy Information Administration will publish its weekly supply figures at 10:30 a.m. ET.

Liubov Georges can be reached at liubov.georges@dtn.com

(AG)