NEW YORK (DTN) -- New York Mercantile Exchange oil futures rose in morning trading ahead of weekly data from the Energy Information Administration, with traders recalibrating their views after the American Petroleum Institute late Tuesday reported an unexpected stock draw for domestic crude oil.
At 8 a.m. CT, NYMEX February WTI crude contract rose 87 cents to $31.31 barrel, having bounced off Tuesday's more than 12-year spot low of $29.93. ICE February Brent futures rose 79 cents to $31.65 bbl, having bounced off Tuesday's 12-year spot low at $30.43.
In products trade, February ULSD futures edged up 0.75 cents to $0.9976 gallon while February RBOB futures nudged up 0.31 cents to $1.0879 gallon.
On Wall Street, U.S. stock futures rose Wednesday morning ahead of their open bolstered by a rebound in oil futures, although the dollar remained stronger versus major world currencies including the euro, the Japanese yen and China's yuan. The stock market is set for the first three days of gains since Christmas, with China's positive trade data boosting the yuan and supporting equities.
The oil futures complex rebounded in overnight trade after Tuesday's selloff that pushed NYMEX West Texas Intermediate crude to dip below $30 bbl for the first time since December 2003. That sell-off was driven by projections by EIA that demand would not be robust this year while supply from the Organization of Petroleum Exporting Countries would increase, with Iran expected to boost its oil production as early as next month once international sanctions on its oil exports are lifted.
But late Tuesday, API indicated an unexpected crude oil stock draw in its report covering the week ended Jan. 8. API's data showed domestic crude oil stocks drawn down 3.9 million bbl, while a survey of analysts by Schneider Electric showed the market expected a 2.25 million bbl crude stock build.
API also reported a 7.0 million bbl gasoline stock build for gasoline for the week profiled, more than twice the 3.0 million bbl build the market expected. Distillate stocks surged 3.67 million bbl last week said API compared with a 2.5 million bbl build the market expected.
The EIA is scheduled to release its supply data for the week-ended Jan. 8 at 9:30 a.m. CT.
Oil futures also were boosted by another set of positive data from China showing crude oil imports increased to 7.8 million bpd in December from 6.7 million bpd in November, with 2015 imports up 10.4% to 6.7 million bpd versus 2014. The imports, a proxy for demand, reflected a crude inventory buildup for China's strategic petroleum reserves, said Barclays Capital analysts.
Also, the oil futures rebound was further attributed to bargain hunting, with analysts saying the market was oversold after eight consecutive sell-offs that set WTI futures plummeting 15% so far in 2016. The market has been trying to stabilize in the past two days, but given the entrenched bearish outlook today's gains may be transitory.
Most of China's economic data have recently showed the world's second biggest economy is slowing, which would threaten demand, while global oil supply would continue to increase well into 2017. But today's trade data from China showed more exports and imports.
George Orwel can be reached at email@example.com
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