DTN Oil

WASHINGTON, D.C.(DTN) – New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange settled Wednesday's session higher following the weekly inventory report from the U.S. Energy Information Administration showing domestic refiners boosted runs to the highest level since January 2020 following a lengthy maintenance season, partially offsetting a 200,000-barrels per day jump in domestic crude-oil production.

While the U.S. dollar sold off early in the session, the greenback recovered in the afternoon and ultimately settled above the 104.00-level against the basket of foreign currencies. Traders expect further volatility in currency markets ahead of next week's highly-anticipated Federal Open Market Committee meeting scheduled for June 14. NYMEX West Texas Intermediate futures for July delivery advanced $0.79 bbl to $72.53 bbl. The front month August contract for the Brent international crude benchmark gained $0.66 to $76.95 bbl. NYMEX RBOB July futures rose $0.0525 to $2.6167 gallon and ULSD July futures gained $0.0243 to $2.3921 gallon.

Wednesday's inventory report from the U.S. Energy Information Administration was mostly supportive for the oil complex, showing a surprise draw in commercial crude inventories accompanied by a jump in refinery run rates as refiners prepare for summer driving season.

Crude-oil inputs at U.S. refiners surged 481,000 bpd during the first week of June to average 16.6 million bpd, according to the EIA weekly inventory report. The surge follows a prolonged maintenance season that, coupled with unplanned outages, heavily depressed refinery run rates over the past two months. U.S. refinery run rates jumped 2.7% from the previous week to 95.8%, compared to expectations for a modest 0.5% gain.

Commercial crude-oil inventories, meanwhile, fell by 452,000 bbl to 459.2 million bbl, and are now 2% below the five-year average, the EIA said. Analysts had expected crude stockpiles to rise by 1.1 million bbl. The drop came despite a 1.9-million-barrel transfer of crude oil last week from the nation's Strategic Petroleum Reserve to the commercial side. Oil stored at Cushing, Oklahoma, the delivery point for West Texas Intermediate, increased by 1.7 million bbl from the previous week to 40.6 million bbl.

U.S. crude-oil production jumped by 200,000 bpd to 12.4 million bpd, the highest level since March 27, 2020, according to the EIA.

In the gasoline complex, commercial gasoline inventories rose by 2.7 million bbl to 218.8 million bbl, compared with analysts' expectations of just a 200,000-bbl increase.

Gasoline supplied to the U.S. market -- a measure of demand -- rose 120,000 bpd during the first week of June to 9.218 million bpd. Four-week average gasoline consumption that smooths out weekly volatility averaged 9.2 million bpd, up by 3.5% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.2 million bpd, up by 1.8% from the same period last year.

Diesel stockpiles, meanwhile, built by 5.1 bbl to 111.7 million bbl, and are now about 68% below the five-year average, the EIA said. Analysts had forecast distillate inventories would rise by 1 million bbl last week. Demand for middle of the barrel fuels firmed 168,000 bpd to 3.814 million bpd.

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