DTN Oil

WASHINGTON (DTN) -- Crude and refined products futures on the New York Mercantile Exchange accelerated losses in late morning trade Wednesday, sending the front-month West Texas Intermediate below $79 per barrel (bbl) despite government data from the Energy Information Administration showing U.S. commercial crude oil inventories unexpectedly decreased in the week-ended Nov. 12 and gasoline supplies dropped above consensus, while domestic refiners ramped up run rates underpinned by strengthening fuel demand.

Inventory data released midmorning indicated nationwide crude oil supplies declined 2.1 million bbl from the previous week to 433 million bbl and are now about 7% below the five-year average. The crude draw was bullish against market expectations for a 500,000 bbl build and earlier estimates from the American Petroleum Institute showing inventories increased by 655,000 bbl from the prior week. This was realized as domestic refiners increased run rates for the fourth consecutive week through Nov. 12, up 1.2% to 87.9% of capacity, compared with analyst expectations for a 0.7% increase.

Domestic crude oil production decreased 100,000 barrels per day (bpd) to 11.4 million bpd, according to EIA.

Oil stored at Cushing, Oklahoma, the delivery point for West Texas Intermediate futures, rose 216,000 bbl from the previous week to 26.6 million bbl.

Additionally, gasoline stockpiles declined by 707,000 bbl from the previous week to 212 million bbl compared with analyst expectations for inventories to have decreased by 600,000 bbl. Demand for motor gasoline remained steady near 9.241 million bbl, slipping only marginally from the prior week, while remaining more than 100,000 bpd above the five-year average. If gasoline demand follows pre-COVID seasonality, it would trend lower through the fourth quarter before a final surge amid the Christmas holiday.

Distillate stocks fell 824,000 bbl to 123.7 million bbl and are now about 5% below the five-year average. Analysts estimated a 1.2 million bbl decline from the previous week. Distillate demand extended higher for the second consecutive week to 4.350 million bpd, gaining 70,000 bpd -- directionally in line with a 0.2% increase seen in DTN Refined Fuels Demand data. Total U.S. diesel demand was up 4.5% relative to the same week in 2019, weakening on a relative seasonal basis after being up 7.1% compared to 2019 levels, according to DTN data.

Total products supplied over the last four-week period averaged 20.2 million bpd, up 3.9% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.3 million bpd, up 10.1% from the same period last year. Distillate fuel product supplied averaged 4 million bpd over the past four weeks, down 0.6% from the same period last year. Jet fuel product supplied was up 44.1% compared with the same four-week period last year.

Near 11:45 a.m. ET, NYMEX December West Texas Intermediate futures slumped $1.85 to trade at $78.88 bbl, NYMEX December RBOB futures declined 5.37 cents to $2.2960 gallon, and the front-month ULSD contract accelerated losses to $2.3819 gallon, down 4.87 cents on the session so far.

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