Oil Futures Slide as Fuel Demand DN, Gasoline Stocks Build


   
   WASHINGTON, D.C. (DTN) -- In post-inventory trade Wednesday, crude and 
refined product futures on the New York Mercantile Exchange moved sharply lower 
as government data showed demand for refined fuels plummeted during the 
week-ended Oct. 16, and gasoline inventories unexpectedly increased with a draw 
in commercial crude oil stocks smaller than expected.

   Near 11:30 AM ET, the November RBOB contract plunged more than 4cts to trade 
near a three-week low $1.1433 gallon after inventory data from the Energy 
Information Administration reported a surprise 1.9 million bbl build occurred 
in domestic gasoline supplies and demand for the transportation fuel eroded for 
the second straight week through Oct. 16.

   At 8.289 million bpd, gasoline supplied to the U.S. market, a measure of 
demand, fell to the lowest weekly rate since the week-ended June 14, down 
nearly 14% versus a year ago. Markets have grown increasingly concerned over 
slowing gasoline demand during the fourth quarter amidst mounting layoffs and 
historically high unemployment rate.

   Distillates fuels stocks declined a more-than-expected 3.8 million bbl to 
160.7 million bbl -- the lowest inventory since the week-ended May 17th. Demand 
for distillate fuels, however, declined 587,000 bpd in the reviewed week after 
climbing to above 4 million bpd in the previous week. Distillate output also 
declined, falling a second week to a 4.131 million bpd more than three-year low.

   NYMEX ULSD November futures dropped more than 4cts or 3% to trade at $1.1334 
gallon in reaction to the data.

   Offsetting bearish stats for refined products, commercial crude oil supplies 
declined 1 million bbl to 488.1 million in the reviewed week even as refiners 
again reduced crude throughputs to 13.026 million bpd. Domestic refiners 
operated at 72.9% of their operable capacity last week, down 2% from the 
previous week.

   Domestic crude production plunged 600,000 bpd last week to average 10.5 
million bpd.

   The December West Texas Intermediate futures declined $1.52 or 3.6% to trade 
at $40.26 bbl.

    

    

   Liubov Georges, 1.646.359.4088, liubov.georges@dtn.com, http://www.dtn.com.




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