DTN Oil Update
Oil Futures Rise on API Draw Report, Fed Rate Cut Hopes
SECAUCUS, N.J. (DTN) -- Oil futures rose for the first time in three sessions on Wednesday, Dec. 10, rebounding from two-week lows, following a weekly drawdown in crude oil inventories reported by the American Petroleum Institute.
A widely anticipated 25-basis point rate cut by the Federal Reserve later in the day also boosted sentiment in most NYMEX futures, despite API's report of higher stockpiles for distillates and gasoline last week. Fuel prices are typically buoyed by economic boosting measures, and the Fed rate cut announcement, expected at 2 p.m. EST, would be the third in a row.
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The NYMEX WTI futures contract for January delivery rose $0.12 to $58.37 bbl. WTI slumped to a two-week low of $58.12 bbl on Tuesday, Dec. 9, on concerns over the world glut in crude exacerbated by growing volumes of oil on water as U.S. and European sanctions prevented Russian oil from reaching buyers in particularly India and China.
ICE Brent for February shipments climbed $0.09 bbl to $62.03 bbl. Brent hit a two-week low of $61.83 bbl in the prior session on concerns about mounting Russian crude supplies offered at large discounts to Brent.
The front-month RBOB futures contract was down $0.0046 to $1.7851 gallon.
NYMEX front-month ULSD futures advanced $0.0183 to $2.2784 gallon.
U.S. commercial crude oil stocks fell by 4.8 million bbl during the week ended Dec. 5, extending the prior weekly drop of 2.48 million bbl, API reported late on Tuesday, Dec. 9.
The Cushing, Oklahoma, delivery point for NYMEX West Texas Intermediate futures, registered an 890,000 bbl drop, matching the prior week's decline at the hub.
On the fuel side, gasoline inventories surged by 7 million bbl, adding to prior a 3.1 million bbl build.
Distillate fuel oil stocks, meanwhile, climbed by 1 million bbl, after the previous weekly increase of 2.88 million bbl.
Market participants will be awaiting the U.S. Energy Information Administration's official inventory report for the week ended Dec. 5, due at 10:30 a.m. EST, to verify the API numbers.
