CRANBURY, N.J. (DTN) -- Nearest delivered New York Mercantile Exchange oil futures and August Brent on the Intercontinental Exchange settled shallowly mixed, with U.S. and international crude benchmarks softening, diesel ending flat, and the gasoline contract settling at a one-week high.
NYMEX July West Texas Intermediate futures settled down $0.14 at $53.76 per barrel (bbl) with one day of trading remaining for the contract, with the August contract settling at a $0.21 bbl premium. ICE August Brent ended down $0.32 at $61.82 bbl, with its premium to WTI narrowing to a fresh two-week low at $8.06 bbl. NYMEX July RBOB futures settled up 1.41cts at $1.7355 gallon, with July ULSD futures up 16 points at $1.8294 gallon.
The mixed session follows bullish weekly supply statistics from the Energy Information Administration, with EIA reporting gasoline demand reaching a 9.928 million barrels per day (bpd) record weekly high. Data showed commercial crude stocks down nearly double expectations, while inventory declines for gasoline and distillate contrasted favorably against estimates for supply builds.
Gasoline demand picked up during the most recent four weeks against year ago, averaging nearly 200,000 bpd or 2% higher than year ago at 9.66 million bpd through June 14. Cumulatively, both gasoline and distillate demand are flat with year ago at 9.265 million bpd and 4.073 million bpd, respectively.
U.S. crude and products exports also gained sharply, up 979,000 bpd on the week to an 8.831 million bpd 2019 high.
Nonetheless, commercial crude stocks in the United States still hover near a 20-month high and 50 million bbl above the five-year average. The supply surplus is hanging over the market as concern over economic growth remains front-and-center despite Tuesday's news U.S. President Donald Trump and China's President Xi Jinping would meet at the June 28-29 G-20 Summit in Japan.
The Federal Reserve on Wednesday afternoon maintained expectations for 2.1% annual growth in U.S. gross domestic product this year after lowering the forecast 0.2% in March, while boosting 2020 annualized GDP growth 0.1% to 2%.
The Federal Open Market Committee's policy statement released this afternoon stated, "Economic activity is rising at a moderate rate," although pointed to weakness in business fixed investment.
Fed officials maintained the federal funds rate at 2.5%, but noted low inflation risk. Fed rate hikes are aimed at curtailing inflation. Federal Reserve highlighted uncertainty over the economy, signaling the potential for a 50-basis-point cut in the federal funds rate later this year which aligns with market expectations for two rate cuts in 2019. One Fed official dissented, wanting to lower rates 25 basis points at Wednesday's meeting.
The U.S. dollar weakened to a 96.515 two-week low in index trading as the 2 p.m. EST FOMC statement was made public, trimming the decline to 0.571 at 96.582 at settlement. The weaker U.S. dollar and expectations for loosening monetary policy boosted WTI futures late afternoon.
Brian L. Milne can be reached at email@example.com
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