DTN Oil
Oil Steadies After Advance on Stock Draws, Crude Demand
VIENNA (DTN) -- Oil futures closest to expiration on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange steadied Thursday morning, shedding some of Wednesday's session gains in early trade as the market returned to caution after a brief advance following data releases in the United States on Wednesday.
Prices initially sold off Wednesday after the Bureau of Labor Statistics reported consumer level inflation slowed in April, with the Consumer Price Index up 3.5% year-on-year compared to the 3.6% increase seen in March. Core CPI, which excludes price-volatile food and energy, slowed to a 3.6% year-on-year increase after being stuck at 3.8% in February and March. BLS also reported a 0.2% month-on-month contraction in real average earnings in April, and U.S. Census Bureau data indicated retail sales last month stayed unchanged from March levels.
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Wednesday's data releases pointed to easing inflationary pressures but also slowing economic growth that adversely impacts fuel demand. Subsequent data from the Energy Information Administration pushed oil futures higher in the session.
EIA reported draws from domestic crude oil, distillate fuel oil and gasoline stocks shortly. A 2.5 million barrels per day (bpd) draw from commercial U.S. crude oil inventories lent some price support, as did the seasonally normal pick up in crude demand, with crude oil throughput up 307,000 bpd on the week.
Industrial production figures for the two largest oil consumers in the world are scheduled for release Thursday. The U.S. industrial sector has been stuck in a rut for the past year, contributing to weak middle distillate demand, while China's recovery has progressed at a much slower pace than was broadly anticipated. The Federal Reserve is set to release data for April at 9:15 a.m. EDT, with the Chinese National Bureau of Statistics' April figures to follow at 10:00 p.m. EDT.
Near 7:30 a.m. EDT, West Texas Intermediate for June delivery and Brent for July delivery were down $0.07 barrel (bbl) to trade near $78.56 and $82.67, respectively. RBOB for June delivery gained $0.0155 to $2.5123 gallon, and ULSD for June delivery was trading near $2.4320 gallon, up $0.0089.
Brian L. Milne can be reached at brian.milne@dtn.com