DTN Oil

WASHINGTON (DTN) -- West Texas Intermediate futures traded on the New York Mercantile Exchange slide below $96 barel (bbl) after weekly inventory data released late morning by the U.S. Energy Information Administration showed a second consecutive build in domestic crude oil inventories through the week ended Feb. 18, even as refiners picked up run rates to meet rebounding gasoline demand in the United States.

Near 12:15 p.m. EST, front-month WTI futures reduced some of the sharp gains made overnight to trade near $95.80 bbl, still up 4% on the session, and international benchmark Brent crude gained more than $6 to $102.84 bbl. NYMEX March RBOB futures rallied 12.62 cents to $2.8515 gallon, with front-month ULSD futures adding 15.37 cents or 5% to $2.9829 gallon.

EIA's inventory report might not have a lasting impact on prices this week amid an unprecedented military campaign launched by Russian President Vladimir Putin in Ukraine. Latest reports suggest Russian army have taken control of more than two-thirds of eastern Ukraine after quickly establishing air superiority over the country. Missile attacks have been launched against at least 17 cities from Kiev, the capital, to Odessa, a key seaport on the Black Sea.

At any moment, U.S. President Joe Biden is scheduled to address the nation on the measures the White House plans to take against Russia, with markets overwhelmingly expecting some sort of ban on oil and gas trade with Moscow.

EIA data showed U.S. commercial crude stockpiles increased by a larger-than-expected 4.5 million bbl last week to 416 million bbl and are now about 9% below the five-year average. Analysts expected crude stockpiles would increase by just 300,000 bbl from the prior week. Oil stored at Cushing, Oklahoma, the delivery point for WTI futures, fell 2 million bbl from the previous week to 23.8 million bbl, EIA said in its weekly report. U.S. crude oil production was unchanged at 11.6 million barrels per day (bpd).

A large crude build came despite domestic refiners having increased their run rates by 2.1% last week to 87.4% of capacity, processing 344,000 bpd more crude compared to the previous week.

In the gasoline complex, commercial stockpiles fell 582,000 bbl to 246.5 million bbl compared with analyst expectations for inventories to have dropped by 1.5 million bbl. Demand for motor gasoline strengthened 87,000 bpd to 8.657 million bbl, suggesting demand has begun to gradually rebound from the winter wave of omicron infections.

Distillate stocks fell by 584,000 bbl from the previous week to 119.7 million bbl, and are now about 18% below the five-year average, EIA said. Analysts expected distillates inventories would fall by 2 million bbl.

Total commercial petroleum inventories decreased by 1.8 million bbl last week.

Total products supplied over the last four-week period averaged 21.9 million bpd, up 12.1% from the same period last year. Over the past four weeks, gasoline supplied to the U.S. market averaged 8.6 million bpd, up 10.7% from the same period last year. Distillate fuel product supplied averaged 4.4 million bpd over the past four weeks, up 3.7% from the same period last year. Jet fuel product supplied was up 40.4% compared with the same four-week period last year.

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