NEW YORK (DTN) -- New York Mercantile Exchange oil futures continue to seesaw within a narrow range this morning as traders weigh a stronger U.S. dollar and excess supply against increased geopolitical risks following the Paris terrorist attacks last Friday.
The attacks have not disrupted supply and have instead bolstered the case for stimulus measures by the European Central Bank. They have not however, weakened the case for an interest rate hike in the United States, and the odds for a rate hike next month have climbed to 70%. As a result, the euro is lower and the dollar has rallied to a seven-month high.
At 9:00 AM ET, NYMEX December West Texas Intermediate futures were 11cts down at $41.63 bbl while ICE January Brent futures eased 7cts to $44.49 bbl.
In products trade, the NYMEX December ULSD futures contract edged up 0.77cts to $1.3928 gallon while the December RBOB futures contract added 0.54cts to $1.2440 gallon.
U.S. stock indices on Wall Street were higher on risk-on trade this morning after German ZEWW investor confidence rebounded in November and the U.S. consumer price index rose 0.2% in October, surpassing an expected 0.1%, after a 0.2% decline in September.
The oil futures complex rose on Monday on technical support and short covering following the terrorist attacks in France that followed another attack the same week in Lebanon by ISIS terrorists.
Traders booked profits in pre-market trade on talk the fallout from the terrorist attacks in France would have a limited impact on oil supply. There remains uncertainty in the market and while oil prices have ceded some of the geopolitical risk premium, and global oil supply glut continues to weigh on oil prices.
The oil market continues to keep a wary eye on these increased geopolitical risks, but traders are also rebalancing portfolios ahead of expiration of the December WTI crude contract on Nov. 20.
The market also is focusing on the potential for bearish weekly U.S. petroleum supply reports. An early survey for the week-ended Nov. 13 showed expectations for a 1.8 million bbl crude oil stock build, which would be the eighth straight weekly increase. Cushing, Oklahoma stockpiles are projected to climb by 500,000 bbl, analysts contend.
The survey showed a mixed outlook for refined products. Commercial gasoline stockpiles are seen moving 500,000 bbl lower on the week and total distillate inventory levels edging 300,000 bbl higher.
The American Petroleum Institute is scheduled to release its report late this afternoon and data from the Energy Information Administration on Wednesday morning.
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