DTN Oil

WASHINGTON (DTN) -- Crude and refined products futures on the New York Mercantile Exchange moved lower in post-inventory trade Wednesday after federal data showed U.S. crude output increased, offsetting a larger-than-expected draw from U.S. commercial crude oil inventories during the week-ended Aug. 13 that was accompanied by a surprise build in gasoline supplies as demand for motor fuel stalled near 9.3 million barrels per day (bpd) for the third week in a row.

Just ahead of the noon hour in New York, NYMEX September West Texas Intermediate futures slipped $0.42 to trade at $66.17 per barrel (bbl), and the international Brent crude benchmark for October delivery fell $0.28 to $68.75 bbl. NYMEX September RBOB futures slipped 1.55 cents to 2.1501 gallon, and the NYMEX September ULSD contract moved down 0.5 cents to $2.1311 a gallon.

Crude oil inventories fell by a larger-than-expected 3.2 million bbl from the previous week to 435.5 million bbl and remain about 6% below the five-year average. Earlier this week, analysts expected crude stockpiles would fall by 1.3 million bbl in the reviewed week and data from the American Petroleum Institute showed a smaller 1.163 million bbl drop. Oil stored at Cushing, the delivery point for West Texas Intermediate, fell by 980,000 bbl from the previous week to 33.6 million bbl.

A larger-than-expected draw came as refiners hiked run rates by 0.4% on the week to 92.2% -- the highest utilization level since the holiday week ended July 2, while processing 16.006 million bbl of crude oil daily.

Domestic production, meanwhile, rose 100,000 bpd from the previous week to 11.4 million barrels per day (bpd) -- the highest output rate since mid-April 2020. In its latest Short-term Energy Outlook, EIA said domestic production would remain flat for most of the year, averaging 11.1 million bpd, before jumping to 11.8 million bpd by the end of 2022.

Gasoline stockpiles surprisingly rose by 696,000 bbl from the previous week to 228.2 million bbl compared with analyst expectations for inventories to have decreased by 2.1 million bbl. Demand for the motor transportation fuel edged modestly higher to average 9.333 million bpd, down nearly 393,000 bpd compared with the five-year average.

Distillate stocks unexpectedly fell by 2.7 million bbl from the previous week to 137.8 million bbl and are now about 8% below the five-year average. Earlier in the week, analysts anticipated distillate supplies would rise by 100,000 bbl. Distillate supplied to the U.S. market, a measure for demand, rose by 589,000 bpd to 4.323 million bpd -- the highest implied demand rate since the week ended July 23.

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