NYMEX Oil Futures Climb as Crude, Gasoline Stocks Fall

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- New York Mercantile Exchange oil futures advanced in post-inventory trade Wednesday with nearby-month West Texas Intermediate briefly trading above $61 barrel (bbl) after federal data showed U.S. commercial crude inventories declined for the first time in six weeks and gasoline stockpiles unexpectedly fell during the week ended March 26 as refiners again ramped up run rates ahead of the traditional summer driving season as they continue to recover from forced shutdowns in February triggered by Winter Storm Uri.

Near the noon hour, West Texas Intermediate futures for May delivery edged 33 cents higher to $60.89 bbl and the Brent May contract on the Intercontinental Exchange declined 25 cents to trade just below $64 bbl ahead of Wednesday afternoon's expiration. Next-month delivery June contact expanded its premium to 45 cents, trading near $64.31 bbl. NYMEX April ULSD futures pared an earlier advance to trade near $1.7936 gallon, with May futures trading with a modest premium. NYMEX RBOB April futures traded little changed near $1.9909 gallon and next-month delivery May contact edged higher to $1.9980 gallon before assuming the front position on Thursday.

After building for five consecutive weeks, U.S. commercial crude stockpiles declined 876,000 bbl during the week ended March 26 to 501.8 million bbl, although are still about 6% above the five-year average, data released Wednesday morning from the Energy Information Administration show. Earlier in the week, analysts forecasted crude stockpiles would fall by 600,000 bbl from the previous week. American Petroleum Institute data reported Tuesday estimated crude supplies spiked 3.901 million bbl in the reviewed week, weighing on the complex in overnight trading.

The refining utilization rate jumped by a better-than-expected 2.3% from the previous week to 83.9%, the highest run rate in a year, while up from a 56% all-time low averaged during the final week of February. Increased refiner output comes as mobility data indicates driving activity picked up significantly in the final weeks of March as states and local governments further eased quarantine restrictions.

U.S. crude oil production rose a second week to 11.1 million bpd as of March 26, recovering 1.4 million bpd since Winter Storm Uri shuttered much of the shale production in Texas, Oklahoma and neighbor states in mid-February.

Gasoline stockpiles decreased by 1.7 million bbl to 230.5 million bbl compared with market expectations for inventories to rise by 1 million bbl from the previous week. Demand for motor fuel jumped to a fresh six-month high 8.891 million bpd, contrasting sharply with last year's accelerated decline to 6.659 million bpd as the pandemic shuttered the economy.

Distillate stocks rose 2.5 million bbl to 144.1 million bbl and are now 4% above the five-year average, the EIA said. Analysts had estimated distillate supplies would rise by a smaller 400,000 bbl from the previous week. Distillate supplied to the U.S. market, a measure of demand, improved 521,000 bpd from the previous week to 4.113 million bpd.

Total products supplied over the last four-week period averaged 19.2 million bpd, down 4.9% from the same period last year.

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

Liubov Georges