DTN Oil

WASHINGTON (DTN) -- Nearest delivery oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled Wednesday's session little changed, with West Texas Intermediate futures reversing earlier losses after the U.S. dollar fell back to a near 4 1/2 month low in afternoon index trade, while rising domestic crude oil stocks and lack of demand growth for refined fuels kept gains in check.

The U.S. crude benchmark for September delivery finished Wednesday trade flat at $41.90 barrel (bbl) and the international Brent futures contract settled at $44.29 bbl, also registering marginal change on the session. NYMEX ULSD August futures posted a modest loss to end at $1.2707 gallon, likely under pressure from federal data showing U.S. distillate supplies rose 1.1 million barrels (bbl) last week. U.S. demand for distillate fuels, which includes diesel and fuel oil, tumbled 469,000 barrels per day (bpd) or 13% during the week reviewed to 3.223 million bpd, down nearly 25% from last year. NYMEX RBOB August futures also registered little change on the session to finish at $1.2828 gallon. The Energy Information Administration reported domestic gasoline stockpiles declined 1.8 million bbl last week to a fresh 17-week low 246.7 million bbl. However, demand for motor gasoline posted another weekly drop, down about 100,000 bpd to 8.550 million bpd, 11.6% lower than the same time a year ago.

Wednesday's inventory report from the EIA was mostly bearish for the oil complex with U.S. commercial crude oil inventories having increased by 4.9 million bbl last week as refined run rates unexpectedly dropped. The data showed U.S. crude oil refinery inputs averaged 14.2 million bpd during the week ended July 17 -- 103,000 bpd lower than the previous week while down about 17% from a year earlier. Meanwhile, domestic oil production nudged higher at 11.1 million bpd in the week profiled.

In the broader markets, U.S. equities continued higher in afternoon trade Wednesday, with gains spurred by the reported progress in stimulus talks on Capitol Hill. Sources told CNBC that Senate Republicans are considering extending supplemental unemployment benefits at $400 per month through December. That would be lower than the current benefit of $600 per week. The stimulus deal is rumored to include additional $1,200 checks to American households. The Dow Jones Industrial gained 128 points or 0.5% and S&P 500 advanced 0.4%. The U.S. dollar continued its downward spiral on Wednesday to end at a 4 1/2 month 94.925 against the basket of foreign currencies. The U.S. dollar is set to weaken further as risky assets gain momentum while domestic economy struggles to recover from a COVID-19 pandemic. The greenback has now been locked in a 4-week losing streak, its longest in nearly 1 1/2 years.

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

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