Oil Mixed in Friday Trade
NEW YORK (DTN) -- New York Mercantile Exchange (NYMEX) spot-month oil futures were mixed Friday morning after coming off one-week highs posted overnight, with the market pressured by a strengthening U.S. dollar and expectations Baker Hughes would report early afternoon an increase in the number of oil rigs operating in the United States for this week.
The Baker Hughes report follows last week's data that showed the addition of 26 oil rigs that lifted the rig count to a 791 near three-year high. Analysts said the market would remain choppy ahead of the 1 p.m. ET release of the weekly rig count.
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The Energy Information Administration (EIA) reported midweek that Cushing crude oil inventories plunged 3.6 million barrels (bbl) to a 32.7 million bbl better than three-year low during the week ended Feb. 9, although total commercial crude stocks nationwide increased 1.8 million bbl on the week and crude production rose 20,000 barrels per day (bpd) to a 10.271 million bpd fresh record high.
The continued rise in U.S. crude output threatens to delay a global oil market rebalancing, offsetting year-on-year growth in global oil demand and steep stock draws in 2017 by the 35-country members of the Organization for Economic Cooperation and Development, according to the International Energy Agency this week.
Friday's trading comes in front of a weekend meeting by the Joint Ministerial Monitoring Committee that will review compliance with production cuts of 1.8 million bpd by the Organization of the Petroleum Exporting Countries (OPEC) and 10 non-OPEC oil producing countries led by Russia. The JMMC is co-chaired by Russia and Saudi Arabia and includes representation from three other OPEC members.
OPEC in their Monthly Oil Market Report issued earlier this week said oil production by its 14 members averaged 32.3 million bpd in January, down 8,000 bpd versus December.
In currency trade, the U.S. dollar strengthened from a two-week low, with oil and the dollar having an inverse relationship.
In early trade, NYMEX March West Texas Intermediate crude futures were down 17 cents at $61.17 bbl, seesawing after trading overnight to a one-week high of $61.89. ICE April Brent crude futures gained 6 cents to $64.39 bbl, holding below Thursday's $65.15 five-day high. NYMEX March ULSD futures edged up 0.59 cents at $1.8975 gallon while March RBOB futures was little changed at $1.7350 gallon.
George Orwel can be reached at george.orwel@dtn.com
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