DTN Oil

WASHINGTON (DTN) -- New York Mercantile Exchange oil futures held higher in post-inventory trade Wednesday despite government data released Wednesday morning from the U.S. Energy Information Administration that revealed an unexpected build occurred in domestic commercial crude oil inventories during the first week of June along with an outsized increase in distillate stocks, while gasoline stockpiles posted a surprise draw as demand for motor fuel jumped above 9.1 million barrels per day (bpd).

U.S. commercial crude oil inventories rose by 2 million carrels (bbl) from the previous week to 416.8 million bbl, and now stand about 15% below the five-year average. Earlier this week, market analysts called for oil inventories to have decreased by 1.9 million bbl in the reviewed week.

Oil stored at Cushing, Oklahoma farm tanks -- the delivery point for West Texas Intermediate futures, decreased 1.6 million bbl to 23.4 million bbl. Domestic oil production remained unchanged at 11.9 million bpd, while refiners processed 16.4 million bpd of crude oil, up 355,000 bpd from the previous week. The refining run rate jumped 1.6% from the previous week to 94.2% compared with analyst expectations for a 0.4% increase.

Higher refinery activity came as demand for motor gasoline picked up in the first week of June, with gasoline supplied to the U.S. market climbing above 9.1 million bpd -- the highest weekly rate this year. Demand for distillate fuels edged lower to 3.650 million bpd, down 319,000 bpd from the previous week. Gasoline inventories dropped by an unexpected 812,000 bbl to 218.2 million bbl and are about 9% below the five-year average. Earlier this week, analysts expected inventories to have increased by 300,000 bbl from the previous week.

Total products supplied to the U.S. market over the last four-week period averaged 19.8 million bpd, up 3.9% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9 million bpd, down 0.9% from the same period last year. Distillate fuel product supplied averaged 3.8 million bpd over the past four weeks, down 2.8% from the same period last year. Jet fuel product supplied was up 26.5% compared with the same four-week period last year.

Near 11:30 AM ET, NYMEX WTI July futures advanced $1.15 to $120.60 bbl, and international benchmark Brent crude for August delivery rallied $1.33 to $121.92 bbl. NYMEX July RBOB futures rallied 2.77 cents to $4.1843 gallon, with the front-month ULSD futures fell 1.54 cents to $4.3042 gallon.

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