NYMEX Oil Futures Mostly Lower

NYMEX Oil Futures Mostly Lower

NEW YORK (DTN) -- New York Mercantile Exchange oil futures were mixed, with the crude and ULSD contracts lower on a strong dollar and oversupply and RBOB futures higher amid strong seasonal demand, while easing risks linked to the Greece debt crisis limited the downside.

Analysts said August NYMEX August West Texas Intermediate contract is testing support at $50.00 bbl, with traders moving to square their positions ahead of the contract's expiration Tuesday (7/21) afternoon.

At 9:00 AM ET, the NYMEX August WTI crude oil contract was down 21cts at $50.68 bbl after inside. The ICE September Brent contract eased 45cts to $56.65 bbl, with Brent's premium over WTI at $5.96 bbl.

In products trade, the NYMEX August ULSD contract eased 1.82cts to $1.6459 gallon, off a six--month spot low at $1.6438. The NYMEX August RBOB contract was little changed, up 0.23cts to $1.9309 gallon, off a five--day high at $1.9448.

On Wall Street, equities were higher while the U.S. dollar rallied to a three--month high versus a basket of six major currencies on expectation the Federal Reserve would hike the federal funds rate later this year while risks related to the Greek debt crisis ease.

Fed Chair Janet Yellen reiterated last week the federal funds rate would increase later this year as the U.S. economy continues to improve. Data last week showed U.S. consumer price index rose 0.3% in June while housing starts soared, further supporting the dollar.

Greek banks that closed three weeks ago reopened today after receiving emergency liquidity funds from the European Central Bank while Athens repaid loans that were due July 20 to the International Monetary Fund and the ECB.

Greece secured a bridge loan last week after signing a three--year $95 billion bailout package with euro--zone creditors. German Chancellor Angela Merkel today said Greece may get some sort of debt relief such as longer maturity dates and lower interest rates, but not a reduction in the principal amount.

NYMEX oil futures posted weekly losses last week on expectation of an increase in Iran's oil exports following a July 14 nuclear deal with Tehran and six world powers that would ease sanctions on Iran.

Iran exported 1.4 million bpd last month, down from 1.6 million bpd prior to the imposition of sanctions on its crude exports in 2011, according to the Energy Information Administration. A Barclays Bank report said the market is overly optimistic about an "Iranian [oil] return."

Analysts said oil demand is lagging, citing Saudi Arabia's recent decision to cut its official selling price for Asian customers. Data published Sunday (7/20) by the Joint Organization of Data Initiative shows Saudi crude oil exports fell in May to a five--month low of 6.94 million bpd, down from 7.74 million bpd in April.

EIA's report for the week--ended July 10 showed a 4.3 million bbl crude oil stock draw, but inventories at the Cushing, Oklahoma, supply hub, which also acts as a delivery point for WTI futures, increased by 400,000 bbl. EIA showed distillate fuel stocks increased 3.8 million bbl while gasoline stocks edged 58,000 bbl higher for the week.