Oil Futures Mixed in Choppy Trade

WASHINGTON -- Oil futures nearest delivery on the New York Mercantile Exchange and Intercontinental Exchange Brent crude settled mostly lower after Brent breached the $72 resistance point in a back-and-forth trade Wednesday. Government supply data failed to push the market to the upside.

The Energy Information Administration said mid-morning that U.S. commercial crude inventories fell 1.4 million bbl in the week ended April 12, below the 3.096 million drawdown reported late Tuesday by the American Petroleum Institute.

EIA reported a ninth straight drop in domestic gasoline supplies, down 1.174 million bbl last week to 227.955 million bbl, the lowest level in 19 weeks. However, data also detailed a substantial decline in implied gasoline demand last week to 9.420 million bpd, 4.2% below the corresponding week a year ago.

For the four weeks ended April 12, implied gasoline demand at 9.370 million bpd was 0.2% below the corresponding four-week period last year.

Oil futures were lifted in early morning trade by a slew of bullish economic figures from China, pointing to recovery in the world's second largest economy after months of sluggish growth. China's National Bureau of Statistics said on Wednesday the economy expanded 6.4% in the first quarter against a year ago, supported by better-than-expected industrial output and retail sales. Data showed manufacturing output surged 8.5% year on year in March, the fastest growth since July 2014, while retail sales for March grew by 8.7% year on year, exceeding market expectations for 8.4% increase. China's refinery throughput rate also increased by a better-than-expected 3.2% in March, indicating a strong fuel demand from an Asian economic giant.

Market observers credited the strong growth in Chinese economy to stimulus measures announced by Beijing last year to prop up the ailing economy.

The Federal Reserve said on Wednesday that economic activity in the United States grew at a slight-to-moderate pace in March and in early April. Across all of the Fed's 12 districts, consumer spending was sluggish, as prices rose on the back of tariffs and higher freight rates. Earlier this week, the Fed said industrial output fell 0.1% in March, pulled down by trade tensions with China and slowing global economy. Federal data showed manufacturing production fell at 1.1% in the first quarter, while U.S. economic output slowed to a 2.2% in the last three months of 2018 from 3.4% in the third quarter, pointing to a downward vector in domestic economy.

NYMEX May West Texas Intermediate crude futures settled $0.29 lower at $63.76, while ICE June Brent crude settled down $0.10 at $71.62 bbl. NYMEX May RBOB futures finished the session 1.01cts up at $2.0418 gallon, as NYMEX May ULSD futures settled down 1.30cts to $2.0692 gallon.

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