DTN Oil

WASHINGTON (DTN) -- New York Mercantile Exchange oil futures turned mixed in late-morning trade Wednesday, reacting to inventory data from the U.S. Energy Information Administration showing domestic crude oil stockpiles increased sharply last week, while supplies of refined fuels dropped by more than 7 million barrels (bbl) amid higher fuel demand.

U.S. commercial crude oil inventories fell for the first time in four weeks through May 5, rising 3 million bbl to 462.6 million bbl, and are now about 1% below the five-year average. Markets have mostly expected crude stockpiles would fall by 800,000 bbl from the prior week. The build was realized on the back of another 2.9-million-bbl transfer of crude oil last week from the nation's Strategic Petroleum Reserve to the commercial side. Such sales will continue through the end of June, according to the Energy Department, which is conducting the transactions.

Oil stored at Cushing, Oklahoma, hub -- the delivery point for West Texas Intermediate -- increased 397,000 bbl from the previous week to 34 million bbl, the EIA said in its weekly report. U.S. crude oil production remained unchanged at 12.3 million bpd.

Domestic refiners raised utilization by 0.3% from the previous week to 91% of capacity, processing 15.745 million bpd in the reviewed week. Analysts were expecting a larger 0.5% increase in refinery run rates.

In the gasoline complex, stockpiles slid 3.2 million bbl last week to 219.7 million bbl compared with analyst expectations for an 800,000-bbl decrease. Demand for gasoline, meanwhile, improved by 685,000 bpd to 9.303 million bpd ahead of the busy summer travel season.

Distillate stocks, which are mostly diesel fuel, fell by 4.2 million bbl to 106.2 million bbl, and remained about 15% below the five-year average, EIA said. Analysts had expected distillate inventories would fall 400,000 bbl from the previous week.

Total products supplied over the last four-week period averaged 19.9 million bpd, up 2.5% from the same period last year. Over the past four weeks, gasoline supplied to the U.S. market averaged 9 million bpd, up 2.2% from the same period last year. Distillate fuel supplied averaged 3.9 million bpd over the past four weeks, up 0.1% from the same period last year.

Near 11:15 a.m. EDT, NYMEX WTI futures for June delivery declined $1.08 to $72.63 bbl. NYMEX RBOB June futures increased $0.0172 to $2.4968 gallon and ULSD April futures gained $0.053 to $2.3964 gallon.