DTN Oil

WASHINGTON (DTN) -- Nearest delivery oil futures on New York Mercantile Exchange remained range-bound in post-inventory trade Wednesday, with firmness developing in the front-month RBOB contract after federal data showed gasoline supply fell to the lowest level in 14 weeks while demand for motor fuel reversed sharply higher during the week ended July 3, although the large crude build capped the upside.

Energy Information Administration data reported midmorning that commercial crude supplies unexpectedly rose by 5.7 million barrels per day (bpd) from the previous week to 539.2 million barrels, about 18% above the five-year average. The large build was not in sync with market expectations for a 3.4 million barrels drawdown yet exceeded earlier estimates for a more modest build from American Petroleum Institute. The crude build was realized as imports jumped by 1.4 million bpd to 7.4 million bpd, while exports slowed further to below 3.0 million bpd.

At the key Cushing supply depot in Oklahoma, the delivery location for the New York Mercantile Exchange West Texas Intermediate futures contract, inventory moved off a 13-week low with the first gain in four weeks, up 2.206 million barrels (bbl) to 47.788 million bbl. Front-month West Texas Intermediate futures have been stuck near $40 bbl for the past couple days and failed to be moved by the data to remain rangebound into early afternoon Wednesday.

Possibly keeping the floor under WTI, U.S. gasoline demand spiked 205,000 barrels per day to 8.766 million bpd, easing some fears over lost driving demand as coronavirus pandemic sweeps through California, Texas and Florida. U.S. gasoline inventories fell more-than-expected 4.8 million bbl during the week profiled, with analysts forecasting a more modest decrease of 1.8 million bbl.

EIA data show refining capacity utilization jumped by 2% from the previous week to 77.5%, versus expectations of 0.3% increase. Refinery crude throughputs increased 314,000 bpd from the previous week to 8.766 million bpd.

Distillate stocks, including heating oil and diesel fuel, spiked 3.1 million barrels to 177.3 million barrels, about 28% above the five-year average. Implied demand for distillates declined 759,000 bpd or 20.1% in the week ended July 3 to 3.019 million bpd.

Total products supplied over the last four-week period averaged 17.8 million barrels a day, down by 15.1% from the same period last year.

Near 11:30 a.m. ET, NYMEX August WTI futures traded flat near $40.60 bbl, while August ULSD futures moved marginally lower to near $1.2341 gallon and front-month RBOB contact advanced 1.10 cents to $1.2867 gallon.

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

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