Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange held mostly higher in post-inventory trade Wednesday, drawing support from the second weekly decrease in Cushing storage tanks in Oklahoma and output curtailments by North American producers, easing concerns over a glutted market.

On the session, West Texas Intermediate July futures advanced $1.53 to a ten-week spot high $33.49 barrel (bbl) settlement after Energy Information Administration inventory data showed commercial crude stocks were drawdown 5 million bbl last week with the decline driven by a 5.5 million bbl draw at Cushing. At 54.774 million bbl, tanks at Cushing are 72% full as of May 15, down 11% in the first half of May. Cushing is the underlying delivery location for the WTI contract.

The international crude benchmark Brent futures contract surged $1.10 to $35.75 bbl, the highest settlement since April 8.

NYMEX June ULSD futures gained 1.7 cents to $0.9906 gallon, holding below Monday's five-week spot high $1.0286 gallon. Data reported distillate fuel inventories increased for the seventh straight week, rising 3.8 million bbl to a three-year high 158.8 million bbl and demand for distillates fell another 4% on week, pressing the contract back below $1 gallon.

NYMEX June RBOB futures reversed off a ten-week spot high $1.0888 to end fractionally lower at $1.0438 gallon under pressure from an unexpected 2.8 million bbl build in U.S. gasoline supplies last week. Data showed implied demand for motor gasoline dropped for the first time in six weeks, falling 8.2% or 608,000 barrels per day (bpd) to 6.790 million bpd, down 28% from the same week in 2019.

Wall Street closed another session with solid gains on Wednesday, spurred by hopes of the imminent reopening of the U.S. economy, with all 50 states now moving to ease lockdown restrictions to varying degrees. St. Louis Federal Reserve Chief Bullard said Wednesday there is still potential for a V-shape recovery, projecting economic activity to pick up in the fourth quester.

Federal Reserve Chairman Jerome Powell was more circumspect in his comments before the Senate Finance committee this week, indicating an extension of the small business loan program and further measures to support the economy against the headwinds of the pandemic are necessary. Top financial advisers to the White House warned the number of unemployed is likely to increase in the coming weeks, which is seen capping prospects for a swift economic recovery.

Data from the Eurozone also offers some cautious optimism, showing consumer confidence index gained 5.4% this month to a still negative 51 reading. May is the first month of partial reopening in some Eurozone economies. Germany's ZEW Survey on business expectations shows improvement to 51 in May versus consensus of 33.5, reflecting a more optimistic assessment of the German economy than in April.

Liubov Georges, 1.646.359.4088, liubov.georges@dtn.com, www.dtn.com.

Liubov Georges