Oil Climbs Higher in Midday Trade

WASHINGTON, D.C. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange continued higher following the release of weekly supply data, shrugging off a larger-than-expected 7.1 million barrel (bbl) build in U.S. commercial crude stocks in the week ended April 5, while RBOB futures spiked on a steep gasoline drawdown that lowered inventory to a 17-week low.

The build in commercial crude stocks for the first week of April reported midmorning by the Energy Information Administration was well above market expectations of 2.5 million bbl build in U.S. inventories, and more than the 3 million bbl inventory gain reported late Tuesday by the American Petroleum Institute.

The unexpected size of the build pushed U.S. commercial crude stocks to a 456.6 million bbl six-week high, and widened a year-on-year surplus to 27.9 million bbl or 6.5%.

The build was realized while U.S. crude production remained at a record high level of 12.2 million barrels per day (bpd) during the week profiled, and a 210,000 bpd increase in the net crude import rate to 4.25 million bpd as exports declined for a third week due to the partial closure of the Houston Ship Channel.

EIA reported total gasoline inventories were drawn down by larger-than-expected 7.7 million bbl to 229.1 million bbl, the lowest level since the week ended Dec. 7, 2018. Gasoline stockpiles are 4.1% below the same week last year and moved below the five-year average for this time of year. Data showed implied gasoline demand spiked 676,000 bpd to 9.806 million bpd in the week reviewed, 5.7% higher than the corresponding week in 2018. For the four weeks ended April 5, implied gasoline demand at 9.368 million bpd was 1.2% higher the corresponding four-week period last year.

Distillate fuel inventories declined by less-than-expected 116,016 bbl to 128.1 million bbl, reaching a 14-week low after declining for four straight weeks. Distillate fuel inventories are about 6% below the five-year average for this time of year.

Near the noon hour in New York, Nymex May West Texas Intermediate futures were up $0.23 near $64.21 bbl, and ICE June Brent was up $0.79 near $71.40 bbl, trading at fresh five-month high on the spot continuous chart. Nymex May RBOB futures spiked more than 5 cents to $2.0490 gallon and May ULSD futures gained 1.84 cents to near $2.0633 gallon.

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