WTI deepens Loss as Inventory Rises, Gasoline Demand Slumps

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON, D.C. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange moved mixed ahead of the noon hour in New York Wednesday after federal data reported U.S. crude and refined products inventories increased sharply during the third week of September while total product supplied to the domestic market remained a full 7% below last year's consumption rate, further evidence of demand destruction amid a broader economic slowdown.

U.S. commercial crude oil inventories climbed 1.1 million barrels (bbl) from the previous week to 430.8 million bbl, and are still about 2% below the five-year average, according to Wednesday's weekly inventory data from the U.S. Energy Information Administration. Crude build was realized even as the refining utilization rate unexpectedly jumped 2.1% from the previous week to 93.6% of capacity.

Oil stored at Cushing, Oklahoma, the delivery point for the West Texas Intermediate contract, increased 343,000 bbl last week to 25 million bbl. Domestic crude oil production remained unchanged from the previous week at 12.1 million barrels per day (bpd). Gasoline stockpiles surprisingly rose 1.6 million bbl to 214.6 million bbl compared with analyst expectations for inventories to have decreased by 500,000 bbl. Demand for motor gasoline declined for the third consecutive week though Sept. 16 to 8.322 million bpd -- a ten-week low.

Distillate stocks climbed 1.2 million bbl to 117.3 million bbl and are now about 18% below the five-year average, EIA said. Analysts expected distillate inventories had risen 500,000 bbl last week.

Total products supplied over the last four-week period averaged 19.6 million bpd, down 6.7% from the same period last year. Over the past four weeks, motor gasoline product supplied to the U.S. market averaged 8.5 million bpd, down 7.7% from the same period last year.

Distillate fuel product supplied averaged 3.4 million bpd over the past four weeks, down 15.7% from the comparable period in 2021. Jet fuel product supplied was down 4.7% compared with the same four-week period last year.

Near 11:45 AM ET, NYMEX WTI November futures declined $0.62 to $83.35 bbl, while NYMEX October RBOB futures advanced 2.06cts to $2.4698 a gallon, and front-month ULSD futures dropped to $3.2930 gallon.

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

Liubov Georges