DTN Oil

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange added to gains in late-morning trade Wednesday after the weekly inventory report from the U.S. Energy Information Administration (EIA) showed gasoline and distillate stocks fell by larger-than-expected margins in the week ended Feb. 11. The drop offset a surprise build in commercial crude oil inventories, while another weekly decline in stocks at the Cushing delivery point for West Texas Intermediate futures rallied the U.S. crude benchmark above $94 barrel (bbl).

Near 11:15 a.m. EST, front-month WTI futures advanced $2.73 bbl to $94.79 bbl. NYMEX March RBOB futures rallied 4.83 cents to $2.7178 gallon, with front-month ULSD futures gaining more than 3 cents to $2.8964 gallon.

U.S. commercial crude oil inventories unexpectedly increased by 1.1 million bbl from the previous week to 411.5 million bbl, about 10% below the five-year average. The crude build countered expectations for a 600,000 bbl draw for the week, although the range of consensus was wide, from a 3 million bbl decrease to 3.5 million bbl increase.

The build was realized as domestic refiners scaled back run rates by a large 2.9% from the previous week to 85.3%, suggesting some refiners started spring maintenance programs.

Oil stored at the Cushing tank farm in Oklahoma fell by 1.9 million bbl from the previous week to 25.8 million bbl -- the lowest inventory level since September 2018, with stocks at 33% of working storage capacity.

U.S. crude oil production remained unchanged from the previous week at 11.6 million barrels per day (bpd), according to EIA.

For the gasoline complex, commercial stockpiles unexpectedly fell 1.3 million bbl to 247.1 million bbl compared with analyst expectations for inventories to have increased by 500,000 bbl. Demand for motor gasoline softened 556,000 bpd to 8.570 million bpd despite indications that consumption might have rebounded following winter storms that laid siege to states from the Southern U.S. to Northeast earlier this month.

Distillate stocks fell by 1.6 million bbl to 120.3 million bbl and remain about 19% below the five-year average, the EIA said. Analysts estimated distillate fuel inventories would fall by 1.7 million bbl from the previous week.

Total products supplied over the last four-week period averaged 22.1 million bpd, up 11.9% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.6 million bpd, up 8% from the same period last year. Distillate fuel product supplied averaged 4.5 million bpd over the past four weeks, up 4.5% from the same period last year. Jet fuel product supplied during the four weeks ended Feb. 11 was up 27.7% compared with the same four-week period last year.

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