DTN Oil

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange turned mixed in late morning trade Wednesday after an inventory report from the U.S. Energy Information Administration revealed commercial oil stocks for the week ended April 22 increased in line with consensus, while refiners unexpectedly reduced run rates and distillate stocks dropped by a larger-than-expected margin to the lowest level in 14 years, rallying front-month ULSD futures above $4.57 gallon.

At 107.3 million barrels (bbl), U.S. distillate stocks now stand 21% below the five-year average, having dropped by 1.4 million bbl from the previous week. Market analysts expected distillate inventories to have declined by a more modest 100,000 bbl. The larger-than-expected drop came even as demand for middle of the barrel fuels stalled below 4 million barrels per day (bpd) for the fifth consecutive week.

For gasoline, EIA data showed demand unexpectedly dropped 129,000 bpd last week to a four-week low 8.739 million bpd despite the seasonal pattern for a pickup in consumption. Stocks fell 1.6 million bbl to 230.8 million bbl, compared with analyst expectations for inventories to have fallen by 100,000 bbl.

U.S. commercial crude oil inventories rose 691,000 bbl to 414.4 million bbl, and are now about 16% below the five-year average, EIA said. Analysts expected crude stockpiles to have risen 600,000 bbl from the prior week.

Oil stored at the Cushing tank farm in Oklahoma -- the delivery point for NYMEX West Texas Intermediate futures -- increased 1.3 million bbl from the previous week to 27.5 million bbl. U.S. crude oil production remained unchanged from the previous week at 11.9 million bpd, according to EIA.

Total products supplied over the last four-week period averaged 19.4 million bpd, down 1.6% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.7 million bpd, down 2.2% from the same period last year.

Distillate fuel product supplied averaged 3.7 million bpd over the past four weeks, down 7.4% from the same period last year. Jet fuel product supplied to the U.S. market was up 23.9% compared with the same four-week period last year.

Near 11:30 a.m. EDT, NYMEX June WTI futures dropped $0.87 to $100.78 bbl, and the international crude benchmark Brent contract declined $0.76 to $104.28 bbl. NYMEX May RBOB futures gained 4.41 cents to $3.3865 gallon, and front-month ULSD futures advanced 8.85 cents to $4.5564 gallon.

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