Oil Edges Higher on EIA Supply

NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled marginally higher Wednesday afternoon after quiet trade ahead of the Thanksgiving holiday.

The oil complex fell sharply in midmorning trade after the U.S. Energy Information Administration said U.S. crude oil supply posted a ninth straight weekly stock build, but pared losses after Baker Hughes reported the number of operating U.S. oil rigs fell this week.

The dollar also rose to a new seven-month high in anticipation of an interest rate hike by the Federal Reserve in December.

Geopolitical risks receded after both Russia and Turkey ratcheted down their rhetoric after Tuesday's incident whereby Turkey shot down a Russian war jet in violation of its air space.

The market is closed for the Thanksgiving Day holiday on Thursday.

At settlement, the NYMEX January WTI contract increased 17 cents to $43.04 barrel while the ICE January Brent contract settled 5 cents higher at $46.17 bbl.

NYMEX December ULSD futures added 0.30 cents to $1.4027 gallon at settlement while the December RBOB futures contract gained 0.59 cents to settle at $1.3961 gallon.

U.S. stock indices moved higher across the broad in a quiet trading day following a mixed bag of economic data.

This afternoon, Baker Hughes reported the total rig count in the United States dropped 13 to 744 during the week ended Wednesday, with rigs in operation down 1,173 from a year ago.

There were 555 rigs drilling for oil, a loss of nine on the week and 1,017 lower than the corresponding week a year ago. Rigs drilling for oil account for nearly 75% of the overall rig count, with the remaining rigs drilling for natural gas.

Earlier, EIA reported domestic crude stockpiles added only 960,000 bbl for the week-ended Nov. 20, falling short of an expected build of 1.3 million bbl but still a ninth consecutive weekly increase.

Data shows the refinery utilization rate climbed 1.7% to 92% and 304,000 barrels per day more crude than a week prior was refined into products.

EIA reported crude supplies at the Cushing hub in Oklahoma rose 1.7 million bbl, slightly below the 1.9 million bbl build reported late Tuesday by the American Petroleum Institute but again missing the market's expected increase of 1.5 million bbl.

EIA also reported gasoline stocks increased 2.5 million bbl, surpassing API's data showing a 1.4 million bbl build while the market expected supplies to hold steady at the prior week's level.

Distillate stocks increased 1.0 million bbl, said EIA, surpassing a nearly 700,000 bbl build reported by API and missing an expected 1.7 million bbl draw.

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