Oil Futures Shrug at Bullish EIA Data, Lower Crude Output

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- New York Mercantile Exchange oil futures moved lower in post-inventory trade Thursday, with nearby month West Texas Intermediate slipping below $61 per barrel (bbl) even after government data showed a sharp drop in domestic crude and distillate supplies, while refiners increased run rates for the third consecutive week and producers reduced crude output to the lowest level since October 2020.

In early afternoon trade, WTI futures for March delivery traded near $60.75 bbl and the Brent April contract on the Intercontinental Exchange slipped to $64 bbl. NYMEX March ULSD futures traded 1 cent lower to near $1.8275 gallon and front-month RBOB futures fell 1.85 cents to near $1.7925 gallon.

U.S. Energy Information Administration said this morning commercial crude stockpiles fell for the fourth straight week through Feb. 12 to 461.757 million bbl, bringing inventories in line with the five-year average. Last week, crude stocks declined 7.257 million bbl which exceeded prior estimates for a 5.8 million bbl drop from the American Petroleum Institute and analysts' calls for a 2 million bbl draw. Oil stored at Cushing, the delivery point for U.S. stocks, fell 3.028 million bbl from the previous week to 45.016 million bbl.

The draw was realized as domestic producers cut output by 200,000 barrels per day (bpd) from the previous week to 10.8 million bpd and refiners continued to raise throughputs to 14.819 million bpd. This week's inventory report, however, does not reflect severe supply outages in refiners and oil producers across southcentral United States. Industry analysts estimate more than 4 million bpd of refining capacity and 3.5 million bpd of crude production was taken offline due to power outages and freezing weather that disabled equipment.

This week's inventory report was mixed-to-bullish for refined products, showing a higher implied demand for both gasoline and distillates, while a larger-than-expected draw in distillate stocks. At 157.7 million bbl, nationwide distillate supplies still stand about 6% above the five-year average level. Stockpiles fell by 3.4 million bbl in the reviewed week, nearly three times above t calls for a 1.6 million bbl decline.

Gasoline stockpiles increased by 672,000 bbl from the previous week to 257.1 million bbl which compare with analyst expectations for inventories to have risen by 1.2 million bbl. Gasoline supplied to the U.S. market increased by 550,000 bpd from the previous week to 8.407 million bpd.

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

Liubov Georges