Oil Futures Drift Higher as Crude, Distillate Stocks Fall

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Crude and refined products futures on the New York Mercantile Exchange added to gains late Wednesday morning. Front-month West Texas Intermediate held above $66 barrel (bbl) despite government data showing commercial crude stockpiles declined less than expected and refinery throughputs slowed during the week ended May 7. Demand for gasoline stalled below 9 million barrels per day (bpd) after reaching a nine-month high mid-April.

Near 11:30 a.m. EDT, NYMEX June WTI futures gained $1.10 to trade near $66.33 bbl and the July Brent contract on ICE added $1.30 to $69.67 bbl. NYMEX June ULSD futures advanced 3.31 cents to $2.0740 gallon and NYMEX May RBOB rallied 3.18 cents or 1.5% to near $2.1717 gallon.

U.S. commercial crude stockpiles dropped by a modest 426,000 bbl from the previous week to 484.7 million bbl and remain about 2% below the five-year average, according to data released Wednesday morning by the Energy Information Administration. Earlier this week, analysts expected crude stockpiles to fall by 2.2 million bbl, while data from the American Petroleum Institute showed a slightly larger drop of 2.533 million bbl.

Oil stored in Oklahoma at Cushing, the delivery point for the WTI contract, fell by 421,000 bbl from the previous week to 45.9 million bbl.

The smaller-than-expected crude draw came as refining utilization rate fell 0.4% from the previous week to 86.1% compared with analyst expectations for a 0.4% weekly increase. U.S. crude oil refinery inputs averaged 15 million bpd in the reviewed period, which was 223,000 bpd less than the previous week.

Domestic crude production rose by 100,000 bpd from the previous week to 11 million bpd, according to the EIA.

In refined fuels, gasoline stockpiles increased by 378,000 bbl from the previous week to 236.2 million bbl compared with analyst expectations for inventories to fall by 600,000 bpd. U.S. gasoline supplied to the U.S. market, a measure for demand, remained little changed near 8.800 million bpd, holding below the mid-April nine-month high at 9.104 million bpd.

Distillate stocks fell by 1.7 million bbl to 134.4 million bbl and are now 3% below the five-year average. Earlier in the week, analysts estimated distillate supplies would fall by a smaller 1.2 million bbl from the previous week. Demand for distillates declined 157,000 bpd from the previous week to below 4 million bpd at 3.968 million bpd.

Total commercial petroleum inventories increased 3.9 million bbl last week and total products supplied over the last four-week period averaged 19.1 million bpd, up 23% from the same period last year.

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

Liubov Georges