DTN Oil Update
Oil Futures Rise Despite U.S. Crude Stockpile Build
HOUSTON (DTN)-- Oil futures prices rose for a third consecutive trading day on Wednesday, driven by geopolitical events and despite a build in U.S. inventories last week.
The front-month NYMEX WTI futures contract rose by $1.17 to $63.80 bbl,
and ICE Brent for November delivery increased by $1.24 to $67.63 bbl.
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October RBOB gasoline futures edged up by $0.0144 to $2.0092 gallon, and the
front-month ULSD contract was up $0.0167 to $2.3375 gallon.
The U.S. Dollar Index strengthened by 0.058 points to 97.81 against a basket of foreign currencies.
On Tuesday, Israel attacked Qatar, targeting the political arm of Hamas in that country, stoking fears of regional escalation. Additionally, Ukraine intensified attacks on Russian energy infrastructure, striking multiple crude oil and natural gas pipelines over the last 48 hours. These events dampened hopes of a ceasefire agreement, despite recent efforts led by the Trump Administration, and raised expectations of additional sanctions targeting Russian oil trade.
U.S. President Donald Trump reportedly urged EU officials to impose tariffs of up to 100% on China and India to dissuade them from purchasing Russian oil, according to the Financial Times. The EU is in the process of discussing and finalizing the 19th sanctions package against Russia.
Separately, the U.S. Energy Information Administration reported that U.S. commercial crude oil inventories rose by 3.9 million bbl to 424.6 million bbl last week, up 1.3% year-on-year and 3% below the five-year seasonal average. This build exceeded the 1.25 million bbl increase reported by the American Petroleum Institute on Tuesday.
Stocks on the U.S. Gulf Coast rose by 5.5 million bbl in the week ending Sept. 5 as exports dropped sharply.
The Bureau of Labor Statistics reported on Wednesday that producer prices unexpectedly declined in August, potentially raising the odds of Federal Reserve interest rate cuts, which in turn would help boost demand. The Producer Price Index fell 0.1% month-on-month in August, compared with analyst expectations of a 0.3% increase.
