Oil Adds to Gains Despite Large Crude, Gasoline Builds

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange edged higher post-inventory trade Thursday despite federal data from the U.S. Energy Information Administration showing nationwide crude oil stock levels spiked 8.4 million barrels (bbl) during the week ended Jan. 13 as refinery operations remained below normal after widespread disruptions related to bitter cold weather in late December.

U.S. refiners again increased run rates by a smaller-than-expected 1.2% last week to 85.3% of capacity after runs fell to the lowest weekly rate since Winter Storm Uri in February 2021 shuttered much of the refining capacity in the Gulf Coast. Analysts mostly expected run rates to recover by 3% from the previous week. For the week, refiners processed 202,000 barrels per day (bpd) more crude averaging 14.853 million bpd, which is still near the lowest processing rate since late March 2021. Slow recovery in refinery run rates indicates some refiners might have gone into early maintenance, with the turnaround season heaviest in February and March.

Slow recovery in refinery runs led to a massive 8.4-million-bbl build in commercial crude stockpiles compared with expectations for a 1.1-million-bbl decline. At 448 million bbl, commercial crude stockpiles stand about 3% above the five-year average.

Oil stored at Cushing, Oklahoma, hub, the delivery point for West Texas Intermediate, also increased 3.6 bbl from the previous week to 31.4 million bbl.

Domestic oil producers, meanwhile, remained unchanged at 12.2 million bpd.

In the gasoline complex, commercial stockpiles jumped 3.5 million bbl in the reviewed week to 230.3 million bbl compared with expectations for a 1.7 million bbl increase. Demand for gasoline recovered 496,000 bpd in the reviewed week to 8.054 million bpd.

Distillate demand rose 204,000 bpd to 4.024 million bpd after consumption hit the lowest level since April 2020 when the coronavirus pandemic shuttered large chunks of the economy two weeks earlier. Domestic distillate stocks declined by 1.9 million bbl to 115.8 million bbl.

Total products supplied to the U.S. market over the last four-week period averaged 19.7 million bpd, down 6.7% from the same period last year. Over the past four weeks, gasoline supplied averaged 8.1 million bpd, down 4.6% from the same period last year. Distillate fuel supplied averaged 3.6 million bpd over the past four weeks, down 9.8% from the same period last year.

Near 11:45 p.m. EST, WTI for February delivery advanced to $80.22 per bbl, up $0.52, and NYMEX RBOB February contract gained $0.0547 to $2.5782 per gallon, and front-month ULSD futures added $0.0470 to $3.3195 per gallon.

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

Liubov Georges