Oil Futures Flat as Crude Draw Counters Builds in Products

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange traded sideways midmorning Wednesday following the release of weekly inventory data from the Energy Information Administration showing a larger-than-expected decline in U.S. commercial crude oil inventories during the week-ended Jan. 8, but sizable builds in refined product supplies as refiners ramped up run rates.

Near 11:30 a.m. ET, NYMEX February West Texas Intermediate were little changed near $53.20 per barrel (bbl), with Intercontinental Exchange traded March Brent futures down 22 cents to $56.36 per barrel (bbl). NYMEX February ULSD futures were flat near $1.5970 gallon, with February RBOB futures declining 0.83 cents to $1.5447 gallon.

U.S. commercial crude oil supplies declined for the fifth consecutive week through the week ended Jan. 8, pressing stockpiles to the lowest level since late March at 482.2 million barrels per day (bpd). Government data showed a 3.2 million bbl draw from domestic crude stocks during the reviewed week that exceeded calls by analysts for a 1.9 million bbl decline. American Petroleum Institute on Tuesday pegged that draw at a steeper 5.821 million bbl. Crude stored at Cushing, the delivery point for the WTI contract, fell 2 million bbl from the previous week to 57.2 million bbl.

The draw was realized as domestic refiners hiked crude inputs by 274,000 bpd from the previous week to 14.7 million bpd, with utilization rates up 1.3% to 82.0% -- the highest run rate since the late August 2020.

Domestic production remained unchanged at 11 million bpd on the week, down 2,000 bpd against the comparable week a year ago. The agency expects crude output to average 11.1 million bpd for 2021 before rising to 11.5 million bpd in 2022, which compare with a 2020 output rate of 12.2 million bpd.

In refined products, data showed a 4.4 million bbl build in gasoline stockpiles to 245.5 million bbl last week, far above calls for an increase of 1.876 million bbl. Gasoline supplied to the U.S. market edged up 91,000 bpd to 7.532 million bpd, which compares with an implied demand rate of 8.558 million bpd during the same week in 2020. Over the past four weeks, motor gasoline product supplied averaged 7.8 million bpd, down 11% from the same period last year.

Distillate fuel inventories increased 4.8 million bbl during the week reviewed to 163.2 million bbl compared with a 1.9 million bbl build expected by analysts. The large build was realized despite a jumped in implied demand, which increased 668,000 bpd to 3.609 million bpd. Distillate fuel supplied to the U.S. market averaged 3.6 million bpd over the past four weeks, up 3.6% from the same period last year.

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

Liubov Georges