WASHINGTON (DTN) -- Oil futures nearest delivery on New York Mercantile Exchange moved mixed in post-inventory trade Wednesday. Prompt-month ULSD and RBOB contracts were under pressure from a massive 12.7-million-barrel (bbl) increase in refined fuels supplies during the final week of May and persistent weakness in demand for diesel, indicating choppy economic recovery after weeks of coronavirus lockdown.
Energy Information Administration inventory data reported commercial crude oil stocks unexpectedly dropped 2.1 million bbl to 532.3 million bbl, still about 12% above the five-year average. The crude drawdown was realized as the government's Strategic Petroleum Reserve stockpiles increased for the sixth consecutive week, rising 4.020 million bbl to 647.779 million bbl. At the key Cushing supply depot in Oklahoma, the delivery location for the New York Mercantile Exchange West Texas Intermediate futures contract, inventory posted a fourth straight weekly draw, falling 1.739 million bbl to 51.723 million bbl, an eight-week low.
West Texas Intermediate futures for July delivery managed to claw back earlier losses to trade near $37 bbl in early afternoon trade.
The data, however, was once again bearish for distillate fuels, with demand eroding further and stocks building for the ninth consecutive week through the period ended May 29. Distillate inventories added 9.9 million bbl to 174.3 million bbl, about 28% above the five-year average.
Implied demand for distillates tumbled 548,000 barrels per day (bpd) or 16.8% to 2.718 million bpd, down nearly 20% from the same week in 2019.
ULSD June contract remained under pressure in post-inventory trade, down 3.68 cents to $1.0547 gallon, sliding further from a near-eight-week high.
In contrast, demand for motor gasoline increased 296,000 bbl on week to 7.549 million bbl, still about 20% below last year's level.
EIA reported total motor gasoline inventories increased 2.8 million bbl to 257.8 million bbl, while 10.1% above the same week.
NYMEX RBOB contract traded modestly lower to near $1.1083 cents after trading little changed for much of the earlier session.
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