Petroleum futures contracts have backed off sharply from earlier gains, with gasoline prices seeing losses heading into Wednesday afternoon.

Futures prices, which had been buoyed earlier in the day by a report showing the U.S. inflation rate remaining flat last month, reversed course following the release of a bearish inventory and demand report from the Energy Information Administration.

The RBOB futures tumbled by more than 5cts/gal off earlier highs, with the July contract off 0.95ct at $2.3994/gal at about noon ET. August prices were 0.77ct lower at $2.3880/gal. ULSD futures also pulled back from earlier highs, but remained in positive territory, with the front-month contract moving 1.34cts higher to $2.4349/gal after climbing as high as $2.4713/gal. August prices were 1.32cts higher at $2.45/gal.

Oil contracts were about $1 off earlier highs, with July West Texas Intermediate crude ahead by 42cts at $78.32/bbl while August prices were seeing similar gains to $77.97/bbl. August Brent crude was ahead by 45cts at $82.37/bbl, while September prices were 44cts higher at $81.98/bbl.

EIA on Wednesday reported builds in U.S crude, gasoline and distillate supplies, with crude inventories rising by 3.7 million bbl in the week ending June 7. Gasoline supplies rose by 2.6 million bbl, while distillate inventories climbed by 900,000 bbl, EIA reported.

The increases came despite implied gasoline demand during the week rising by about 100,000 b/d to 9.04 million b/d. Distillate demand rose by nearly 300,000 b/d to 3.649 million b/d, according to EIA.

The builds also came as U.S. refinery activity pulled back slightly during the week, with EIA reporting refinery utilization at 95%, almost a half a percentage point lower than the previous week.

The weakening of energy prices came as equity markets rallied Wednesday ahead of the latest policy announcement by the U.S. Federal Reserve later in the afternoon. Hopes that regulators will speed up interest rate cuts were raised after the Labor Department reported Wednesday morning that the U.S. consumer price index showed no change in May, though it increased 3.3% from the same time last year.

The Nasdaq Composite was about 1.75% higher heading into the afternoon, while the Dow Jones Industrial Average was moving up about 0.2%.

The retreat in energy futures was being felt in spot markets that OPIS monitors around the country, with gasoline prices falling in most markets, though continuing to hold onto small gains on the Gulf Coast and in Group 3.

Diesel price gains largely reflected the increases seen by ULSD futures, though Group 3 increases were still hovering at around 2cts/gal.

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,; Editing by Michael Kelly,

(END) Dow Jones Newswires

06-12-24 1306ET