Refined product and crude contracts were all hovering near session highs heading into lunchtime Wednesday following release of the latest federal inventory and production data showing a large decline in oil stockpiles and refinery operations.

U.S. crude contracts were rising by nearly $1/bbl in choppy trading at 11:30 a.m. ET, with the March NYMEX West Texas Intermediate crude contract ahead $1.07 to $75.44/bbl and April prices moving $1.04 higher to $75.31/bbl. The front-month contract is about 50cts off earlier highs.

Globex Brent crude contracts were seeing slightly softer gains, with the March contract ahead by 85cts to $80.40/bbl while April prices gained 90cts to $80.01/bbl.

RBOB futures were leading refined product contracts higher, with the NYMEX February contract moving up 2.86cts to $2.2387/gal, 0.12ct off earlier highs.

The March contract was 2.83cts ahead to $2.2616/gal.

ULSD futures were seeing gains in the neighborhood of a cent per gallon, with the February contract advancing 1.27cts to $2.7040/gal while March prices rose 1.52cts to $2.6786/gal.

The Energy Information Administration on Wednesday reported a 9.2 million bbl drop in crude inventories, putting stocks about 5% below seasonal averages. The recent bout of cold weather across the U.S. also led to a decline in distillate supplies, which fell by 1.4 million bbl and are now about 4% off seasonal averages. Gasoline supplies rose by 4.9 million bbl and are 1% over levels normally seen this time of year.

The increase in gasoline inventories came despite U.S. refinery utilization falling to 85.5%. The drop from the previous week's 92.6% utilization rate likely reflects the impact of cold weather on refinery operations, as large declines were seen in the East Coast, Midwest and Gulf Coast regions.

The decrease in refinery operations was offset by a decline in gasoline demand, with EIA reporting implied demand of 7.88 million b/d during the week ending Jan. 19, about 400,000 b/d lower than the previous week.

The rise in futures prices were also pulling up gasoline and diesel prices in spot markets around the country. Most markets east of the Rockies were seeing increases in line with those on the NYMEX screen, but on the West Coast Los Angeles March CARBOB was seeing increases topping 18cts/gal following a timing roll that marks the start of the seasonal RVP transition period.

Diesel prices in most markets were hewing closely to the NYMEX gains.

Renewable Identification Number prices were on track for a 10th straight day of declines, with both ethanol-based D6 and bio-diesel-based D4 RINs each sinking by 6cts in early trading. Both had hit their lowest levels since 2020 on Tuesday and the slide appears likely to continue Wednesday.


This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.


--Reporting by Steve Cronin, scronin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com


(END) Dow Jones Newswires

01-24-24 1250ET