DTN Oil

WASHINTON (DTN) -- Oil futures traded on the New York Mercantile Exchange drifted higher in midmorning trade Wednesday despite weekly inventory data from the U.S. Energy Information Administration showing commercial oil stocks spiked well above expectations during the week ended April 8 as refiners surprisingly reduced run rates and demand for distillate fuels eroded to the lowest level since the holiday week of July 4, 2021, underscoring continued demand destruction from slowing economy and rattled supply chains.

U.S. commercial crude oil inventories jumped by 9.4 million barrels (bbl) from the previous week to 421.8 million bbl, and are now about 13% below the five-year average, the EIA said. The massive build was bearish against market expectations of a 600,000 bbl gain and 7.757 million bbl build reported by the American Petroleum Institute.

Oil stored at Cushing, Oklahoma, the delivery point for West Texas Intermediate, rose by 450,000 bbl from the previous week to 26.3 million bbl. The larger-than-expected build came as domestic refiners slashed run rates 2.5% from the previous week to 90%, compared with analyst estimates for a 0.3% increase. In the week reviewed, refiners processed 15.5 million barrels per day (bpd), which was 424,000 bpd less than the previous week's average.

U.S. crude oil production was unchanged at 11.8 million bpd, according to the EIA.

In the gasoline complex, commercial inventories fell by 3.6 million bbl to 233.1 million bbl, compared with analyst estimates for inventories to decrease by 600,000 bbl from the previous week. Gasoline demand in the U.S. gained for the second consecutive week through April 8, up by 174,000 bpd to 8.736 million bpd.

Distillate stocks rose fell by 2.9 million bbl from the previous week to 111.4 million bbl, and are now about 17% below the five-year average, the EIA said. Analysts expected distillates inventories would be unchanged from the previous week. Demand for distillate fuels continued lower for the third consecutive week through April 8, falling by 163,000 bpd last week to 10-month low 3.484 million bpd.

Total products supplied over the last four-week period averaged 19.9 million bpd, up by 1.3% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.6 million bpd, down by 2.3% from the same period last year. Distillate fuel product supplied averaged 3.9 million bpd over the past four weeks, down by 0.3% from the same period last year. Jet fuel product supplied was up 23.1% compared with the same four-week period last year.

Near 11:30 a.m. EDT, NYMEX West Texas Intermediate May futures climbed $2.21 to $102.87 bbl, and international benchmark Brent crude rallied $2.67 to $107.30 bbl. NYMEX March RBOB futures advanced 9.02 cents to $3.2425 gallon and the front-month ULSD futures added 8.91 cents to $3.5531 gallon.

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