NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved lower across the board Wednesday morning ahead of federal weekly oil supply data, with the market pressured by a strengthening dollar and industry data released late Tuesday showing a surprise increase in domestic crude oil inventories.
At 8 a.m. CDT, NYMEX September West Texas Intermediate crude futures fell 67 cents to $50.19 bbl amid inside trade, with the August contract having expired on Tuesday. The ICE September Brent crude contract fell 53 cents to $56.71 bbl, with the Brent premium over WTI at $6.31 bbl.
In products trade, the NYMEX August ULSD futures contract was little changed, easing 0.22 cents to $1.6762 gallon, while the NYMEX August RBOB contract fell 3.99 cents to $1.8810 gallon, moving off a four-day low at $1.8768.
On Wall Street, equities were lower while the U.S. dollar index angled higher off a one-week low, as the market expects the Federal Reserve to raise the federal funds rate later this year from near zero. A stronger greenback is bearish for commodities and equities.
The key issue for traders is oversupply. The American Petroleum Institute reported late Tuesday that domestic crude oil stockpiles increased by 2.3 million bbl during the week ended July 17, while a Schneider Electric survey showed the market anticipating a 2.8 million bbl stock draw.
At the Cushing, Oklahoma, supply hub which serves as the delivery point for NYMEX WTI crude futures, supplies rose 900,000 bbl last week API said, while the market expected a 700,000 bbl stock draw.
"The American Petroleum Institute data is bearish if confirmed by the more definitive DOE data," said analyst Tim Evans at Citi Futures, adding that there's concern over "persistent physical oversupply."
The Energy Information Administration is scheduled to release its weekly supply data at 9:30 a.m. CDT.
The EIA data will also provide additional data on summer demand, with strong gasoline consumption providing additional demand for crude by U.S. refineries, which were running over 95% of capacity earlier this month.
Oil supply from the Organization of Petroleum Exporting Countries is above the agreed 30 million bpd ceiling, and the market is concerned last week's nuclear deal would flood the market with additional supply from Iran.
Saudi Arabia's decision last week to cut the official selling price for its Asian oil customers gave the impression of waning demand, but data showing strong demand for oil tankers to China in recent weeks suggests oil demand isn't softening.
George Orwel can be reached at email@example.com
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