Oil Futures Lower in Midday Trade

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Oil futures on New York Mercantile Exchange extended lower late morning Wednesday following inventory data from Energy Information Administration detailing a second consecutive weekly drawdown in gasoline supply and a smaller-than-expected build in commercial crude oil stocks during the week ended May 1, although distillate inventories continued higher for a fifth straight week.

Near 11:45 a.m. ET, NYMEX June West Texas Intermediate futures tumbled $1.60 to trade at $22.94 and front-month RBOB June contract declined 4.58 cents to $0.8556 gallon, reversing from an eight-week spot high $0.9346 gallon. NYMEX ULSD futures for June delivery plunged 8.92 cents to trade near $0.8066.

Energy Information Administration data revealed distillate stockpiles in the United States jumped 9.5 million barrels (bbl) or 6% last week to a 151.5 million bbl nearly three-year high. Implied demand for distillate fuels remained mostly unchanged at 3.129 million barrels per day (bpd) as of May 1, 20% lower than the same week in 2019. Distillate fuels are largely used in industrial and agricultural production, with the latest data underlining the recent contraction in those sectors of the economy.

In contrast, gasoline supply decreased for the second week in a row though May 1, down 3.2 million bbl to 256.4 million bbl, bullish against both market forecasts and earlier estimates from American Petroleum Institute.

Data showed implied demand for motor gasoline rose a fourth straight week, surging 14% or 804,000 bpd to a six-week high 6.664 million bpd.

Domestic refiners once again ramped up crude throughputs for a second week in a row, adding 216,000 bpd to 13 million bpd as of May 1st. Refinery run rates increased 0.9% on week to a four-week high 70.5%.

Commercial crude oil inventories increased less-than-expected 4.6 million bbl in the week profiled to 532.2 million bbl, lifting inventories 12% above the five-year average. At the key Cushing supply depot in Oklahoma, the delivery location for the New York Mercantile Exchange WTI futures contract, inventory posted a ninth straight weekly gain, up 2.068 million bbl to 65.446 million bbl, the highest on-hand since May 2017.

Domestic producers scaled back output by 200,000 bpd to 11,900 bpd during the week ended May 1.

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

Liubov Georges