Crude Cuts Losses After Supply Data

NEW YORK (DTN) -- New York Mercantile Exchange crude futures moved off lows in midmorning trade after the Energy Information Administration’s weekly oil report showed a bigger-than-expected draw for domestic crude oil stocks while ULSD and RBOB futures posted moderate losses after the report showed builds for refined products.

Near 9:55 a.m. CDT, the NYMEX August WTI crude contract was down 29 cents at $52.75 bbl while the NYMEX August ULSD contract was 2.88 cents lower at $1.6965 gallon and the NYMEX August RBOB contract was down 1.94 cents to $1.9113 gallon.

EIA’s report for the week-ended July 10 showed a 4.3 million bbl crude stock draw, surpassing a projected 3.2 million bbl stock draw but below the American Petroleum Institute’s report showing a whopping 7.3 million bbl stock plunge.

EIA also reported gasoline stocks rose 58,000 bbl while the market projected a build of 250,000 bbl. Distillate fuel stocks climbed 3.8 million bbl, EIA said, surpassing a projected 1.8 million bbl increase.

Aside from weekly supply data, oil trading was dominated by the Iran nuclear agreement announced Tuesday that pushed Greece and other economic issues to the backburner.

The debate has moved to Capitol Hill where the deal got a cold reception from lawmakers who are expected to conduct a vigorous review for the next 60 days before giving their approval or disapproval. President Barack Obama said he would veto a Congressional resolution disapproving the deal.

Traders are also watching the dollar, which rose this morning while pressing down oil futures after Federal Reserve Chair Janet Yellen said she still expects interest rates to rise this year, which would remove a key support for oil futures.

The Fed’s easy money policy has been bullish for commodities and equities over the past several years.

Also, China’s 7.0% gross domestic product growth for the second quarter reported overnight lowered expectation for further stimulus measures by China, which prompted the Shanghai composite stock market and oil futures to fall, said analyst Phil Flynn at Price Futures Group in Chicago.

George Orwel can be reached at george.orwel@telventdtn.com

(BAS)