WASHINGTON (DTN) -- Oil futures nearest delivery on New York Mercantile Exchange and Brent crude on Intercontinental Exchange shifted higher in overnight trade, with industry data indicating another weekly draw from Cushing oil storage as markets look to a post-lockdown supply deal among Organization of the Petroleum Exporting Countries and Russia-led partners.
Near 7:30 a.m. ET, NYMEX West Texas Intermediate July futures climbed $0.92 to trade above $36 per barrel (bbl) and Brent crude for August delivery traded up $1.02 at $39.36 bbl. NYMEX ULSD July futures rallied 4.49 cents to $1.0739 gallon and front-month RBOB July contract gained 3.63 cents to $1.1028 gallon.
Oil prices advanced heading into an expected OPEC+ meeting on Thursday, with optimism building for Saudi Arabia and Russia to quickly agree on extending the current 9.7 million barrels per day (bpd) deal for another two months through August. Overnight reports indicate Moscow has warmed up to the idea of extending cuts after a telephone call between U.S. President Donald Trump and Russia's President Vladimir Putin on Monday. Both leaders pledged to work together on stabilizing jittery markets as the global economy reemerges from the coronavirus lockdown.
Under the OPEC+ deal agreed to April 12, the 9.7 million bpd cuts were due to run through May and June, scaling back to 7.7 million bpd from July to December. Saudi Arabia and Gulf allies have been pushing to keep deeper cuts in place for longer, citing uncertain path for demand recovery in the summer months. Producers have yet to announce the earlier date for their planned meeting initially scheduled for June 10.
Separately, industry data released late Monday showed a fourth consecutive crude drop at the key Cushing supply depot in Oklahoma, the delivery location for the WTI futures contract. In the previous week, supplies in Cushing farm tanks fell 3.395 million bbl, sliding below the five-year-average to 53.462 million bbl. American Petroleum Institute and U.S. Energy Information Administration are due to release weekly inventory reports at 4:30 p.m. ET and 10:30 a.m. ET Wednesday, respectively.
In financial markets, U.S. equity futures continued higher in premarket trade Tuesday, seemingly shrugging off violent riots in major U.S. cities. New York City, Washington, D.C., and Los Angeles announced nightly curfews after six straight days of looting and vandalism.
Trump addressed the nation from the Rose Garden Monday, calling on mayors and governors in affected states to "establish an overwhelming law enforcement presence until the violence has been quelled."
"If a city or state refuses to take the actions that are necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them," he added.
Social unrest in the nation's major cities is likely to take its toll on the economic rebound and by extension demand for refined fuels. Mobility data shows traffic activity in New York City, Washington, D.C., and Los Angeles remains below the Jan. 13 baseline despite gasoline demand typically growing following Memorial Day. In Chicago, authorities suspended rail and bus service, while advising essential workers to stay home.
U.S. dollar continued lower in overnight trade, plunging to a better than 12-week low 97.420 cent against a basket of foreign currencies.
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