DTN Oil Update
ULSD Softens, Oil Prices Edge Up as US Fuel Stocks Grow
VIENNA (DTN) -- ULSD futures continued to soften Thursday morning while crude oil and gasoline futures held to Wednesday's gains following the Energy Information Administration's report of across-the-board builds in U.S. oil and fuel inventories last week.
NYMEX ULSD futures for January delivery traded around the $2.3 gallon mark for a second day, sliding $0.0044 to $2.2964 gallon. Front-month RBOB futures, meanwhile, edged up $0.0065 to $1.8337 gallon.
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WTI futures for January delivery rose $0.38 barrel (bbl) to $59.33 bbl, and ICE Brent for February delivery advanced $0.33 to $63 bbl.
The U.S. Dollar Index was little changed, up 0.073 points to 98.927 against a basket of foreign currencies.
The EIA on Wednesday reported increases in crude and transportation fuel inventories in the week ended Nov. 28. Commercial crude oil stocks rose by 600,000 bbl, and distillate fuel oil and gasoline inventories expanded by 2.1 million bbl and 4.5 million bbl, respectively, the agency said.
While fuel inventories typically rise this time of year, the builds helped alleviate some pressure off diesel futures prices, which have slumped 15% since peaking in mid-November.
The European Union's plan to ban imports of fuels refined from Russian crude oil -- amid globally low refinery runs, attacks on Russian refineries and tight inventories -- sparked a diesel rally in late October. Prices reversed course with emerging prospects for Russia-Ukraine peace in mid-November, although the U.S.-led initiative on that has not brought any results.
The overall market outlook for crude oil remains dire, as supply additions are expected to continue to outpace demand growth next year. The geopolitical risk premium helped support prices, but supply outages from attacks on export infrastructure have so far been short-lived.
Growing U.S. pressure on Venezuela and an increasingly bellicose tone from the administration added to supply concerns. Last week, U.S. President Donald Trump announced the U.S. will expand the scope of the strikes it has been carrying out for three months to "land operations" in Venezuela. Last month, crude oil exports from the country surpassed 900,000 bpd, according to tanker tracking data.