Oil Reverses Off 1-Month Lows

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange nearest delivered oil futures spiked in response to unexpected a 4 million-barrel(bbl) drawdown in U.S. commercial crude inventories reported Wednesday morning by the Energy Information Administration, with the data also detailing smaller-than-projected stock declines in gasoline and distillate fuels.

Federal data showed commercial crude oil inventories fell to 466.6 million bbl in the week ended May 3, the first draw in three weeks. The unexpected drawdown contrasts with the 2.806 million bbl increase in U.S. supply reported late on Tuesday by American Petroleum Institute. EIA data also showed domestic refineries again reduced rates, running at 88.9% of their operable capacity in the week profiled versus 89.2% the week earlier. U.S. crude oil refinery inputs averaged 16.4 million barrels per day (bpd) during the week ended May 3, down 41,000 bpd from the previous week and 0.5% below the year prior.

U.S. crude oil imports averaged 6.7 million bpd during the week-ended May 3, a drop of 721,000 bpd from the previous week. Over the last four weeks crude oil imports averaged about 6.8 million bpd, 15.6% less than the same four weeks in 2018.

Nymex RBOB futures gained over a penny, reversing off the one-month low settlement on Tuesday after EIA reported total motor gasoline inventories declined for the 11th time in 12 weeks. Data showed stocks decreased 595,984 bbl to 226.1 million bbl, pushing inventories 9.7% lower than the same week last year and about 2% below the five-year average for this time of year.

Gasoline production continued higher in the week ended May 3 to average 10.129 million bpd, while total motor gasoline imports jumped 344,000 bpd last week to 1.114 million bpd. Data showed implied gasoline soared 643,000 bpd to 9.871 million bpd in the week reviewed, 1% above the corresponding week in 2018.

Distillate fuel inventories were drawn by 159,000 bbl to 125.6 million bbl, pushing distillate stocks to a 19-week low while 9.2% higher than the same week last year. Distillate fuel inventories are about 5% below the five-year average for this time of year.

Distillate fuel production declined 39,000 bpd to 5.089 million bpd last week, 1.9% more than a year ago while imports increased 48,000 bpd to 111,000 bpd on the week. Implied demand for distillates dropped 319,000 bpd to 3.896 million bpd as of May 3, 9.5% below the same week in 2018.

Near 11:45 a.m. ET, Nymex June West Texas Intermediate crude futures traded up $0.75 near $62.15 bbl, while Intercontinental Exchange July Brent gained $0.79 to near $70.67 bbl. Nymex June ULSD futures moved 1.14 cents higher to near $2.0590 gallon, while June RBOB futures rose 1.09 cents near $1.9596 gallon, reversing from $1.9487 one-month low settlement Tuesday session on the spot chart.

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