Oil Futures Pullback on Thursday

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange nearest delivered oil futures and Brent on the Intercontinental Exchange shifted lower in midmorning trade on profit-taking following Wednesday's rally fueled by a larger-than-expected drawdown in gasoline inventories, according to Energy Information Administration.

In midmorning, Nymex West Texas Intermediate May futures moved $0.80 lower to $63.81 after trading at a $64.79 five-month spot high on Wednesday. ICE Brent June contract was down $0.58 to $71.15 per barrel (bbl), also consolidating below Wednesday's $71.78 five-month spot high. Nymex ULSD May futures shifted 0.89 cents lower to $2.0787 after settling above the 200-day average on Wednesday. Nymex RBOB May futures were down 3.5 cents to $2.0342 gallon, edging off a six-month high settlement on the spot continuous chart Wednesday.

Oil futures rallied Wednesday after EIA data showed a larger-than-expected drawdown in U.S. gasoline inventories in the week ended April 5, pressing stocks to a 17-week low. The Washington agency reported total motor gasoline inventories declined for an eighth straight week, while implied gasoline demand spiked 675,000 barrel per day (bpd) to 9.806 million bpd, 5.6% higher from prior year.

Thursday morning, International Energy Agency maintained its projections for world oil consumption to grow 1.4 million bpd to 100.6 million bpd this year, according to its' monthly Oil Market Report. This year, oil consumption growth from the 36 country bloc Organization for Economic Cooperation and Development will account for 300,000 bpd, with the year-on-year demand expansion for non-OECD countries at 1.1 million bpd for a consumption rate of 52.5 million bpd.

On the supply side, IEA projects non-OPEC production to increase 1.7 million bpd this year to 64.4 million bpd, a slower pace than the 2.8 million bpd or 4.7% annual growth rate in 2018.

Organization of the Petroleum Exporting Countries production plunged 550,000 bpd in March to 30.1 million bpd, while the 14-member group reached a 153% compliance rate with their production agreement, said the Paris-based agency.

In its monthly OMR, IEA estimated global oil supply declined 340,000 bpd to 99.2 million bpd in the reviewed month, driven by steep cuts from Saudi Arabia and losses in Venezuela.

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