DTN Oil

WASHINGTON (DTN) -- Nearest delivery oil futures on the New York Mercantile Exchange were mixed in post-inventory trade Wednesday even as government data detailed a massive 24.6 million barrels (bbl) increase in domestic crude, gasoline and distillate fuel supplies during the week ended Dec. 4 accompanied with a sharp decline in implied gasoline demand that plunged to the lowest weekly rate since May 24.

Late morning in New York, NYMEX January West Texas Intermediate futures slipped 18 cents to trade near $45.42 bbl and the Brent contract on the Intercontinental Exchange traded little changed at $48.80 bbl. NYMEX January ULSD futures declined 0.48 cents to trade near $1.4023 gallon and January RBOB futures advanced 1.15 cents to $1.2672 gallon.

U.S. commercial crude oil inventories rose more than 15 million bbl during the week ended Dec. 4, according to data released by the Energy Information Administration Wednesday morning, missing expectations for a 1.2 million bbl drawdown and earlier estimates of 1.4 million bbl build from the American Petroleum Institute. At 503.2 million bbl domestic crude stocks stand 11% above the five-year average.

Large build came despite domestic refiners ramping up crude inputs by 424,000 barrels per day (bpd) from the previous week to 14.436 million bpd. Refiners operated at 79.9%, up 1.7% on the week.

For gasoline, the data showed rapidly deteriorating fundamentals as several large U.S. states, including California, tightened restrictions last week on mobility and business operations. Private data showed traffic volumes across the United States have been trending lower since late October and dropped below the Jan. 13 baseline in the reviewed week. Concomitantly, gasoline supplied to the U.S. market eroded 373,000 bpd from the previous week to 7.60 million bpd -- the lowest weekly demand rate since local governments across the United States started to gradually ease first round of lockdown measures earlier this year.

Gasoline stockpiles increased for the fourth week in row though Dec. 4, climbing 4.5 million bbl to 237.9 million bbl -- the highest inventory level since Aug. 23. The build was smaller than 6.442 million bbl reported by the American Petroleum Institute on Tuesday, lending some support for front-month RBOB futures.

Demand for distillate fuels did not fare better, sliding 373,000 bpd from the previous week to 3.389 million bpd, marking the second build in distillate stockpiles in two months. Supplies increased 5.2 million bbl from the previous week to 151.1 million bbl, widening a surplus against the five-year average to 13%. The large build was not directionally in sync with market calls for a modest drawdown.

Total products supplied over the last four-week period averaged 18.9 million bpd, down 7.5% from the same period last year.

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

(c) Copyright 2020 DTN, LLC. All rights reserved.