WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange eroded further Wednesday, pressing front-month West Texas Intermediate below $20 barrel (bbl) to an 18-year low after weekly inventory data showed total crude and refined product stocks in the United States spiked over 30 million bbl last week as domestic refiners scaled back throughput to a more than decade low.
At settlement, NYMEX May WTI contract dropped $0.24 to $19.87 bbl, edging off a $19.20 bbl low in response to data from EIA showing the largest weekly build in U.S. commercial crude stocks on record. (Federal data tracks weekly crude stocks as far back as 1982.) The supersized 19.2 million bbl build exceeded the market's most bearish expectations as domestic refiners sharply cut run rates to just 69.1% on the week.
ICE June Brent futures retreated 1.91 cents to close the session at $27.69 bbl.
NYMEX May RBOB finished the session little changed at $0.7204 gallon, likely finding support after EIA data showed U.S. implied demand little changed on the week, up 17,000 barrels per day (bpd) at 5.081 million bpd, suggesting a bottom might be forming after plummeting this month amid restrictions on mobility effecting 96% of the country. Gasoline demand last week was still was almost 48% lower compared to a year ago.
NYMEX ULSD futures came under heavy selling pressure Wednesday after distillate fuel stocks surged 6.3 million bbl and demand for distillates plunged 1.050 million bpd, sending front-month ULSD futures to a 51-month spot low at $0.8976 gallon, settling down 3.04 cents at $0.9138 gallon.
Defining the bearish market, the International Energy Agency said Wednesday global oil demand is likely to drop 29 million bpd this month as major economies remain shut-in and "shelter-in-place" orders proliferate. IEA projects the decline curve could be so steep as to erase a decade of growth in a single year.
"When we look back at 2020, we may see it was the worst year in the history of oil markets and the second quarter may have been the worst of the lot," said Fatih Birol, the IEA's executive director. "In that quarter, April may have been the worst month. It may go down as 'Black April' in the history of the oil industry."
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