NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved mixed with an upside bias Wednesday morning ahead of the release of U.S. Energy Information Administration's weekly report that's expected to show a continuing buildup in oil inventories.
The EIA report is scheduled to be released at 9:30 a.m. CT, coming a day after the American Petroleum Institute on Tuesday reported more-than-expected stock builds for the week ended Jan. 29.
In overnight trade, NYMEX West Texas Intermediate and ultra-low sulfur diesel futures contracts posted tentative gains after Russia reiterated its was open to discussing production cuts with the Organization of Petroleum Exporting Countries to stem falling oil prices.
The latest comment from Russia was less definitive than last week's comment on the prospect for a meeting to cut production, but it was enough to support WTI crude oil prices and negated a bearish API data. It bolstered oil prices because after steep declines in the past month, bullish investors are looking for an excuse to rally WTI back to $50 this year and there's a feeling that the downside is overdone, said analysts.
"There are more signs that Russia has had enough of the price collapse," said analyst Phil Flynn at Price Futures. "Oil seemed to rally on comments by Russian Foreign Minister Sergei Lavrov who said if there is consensus among the Organization of the Petroleum Exporting Countries and non-OPEC members to meet, 'then we will meet.'"
Flynn also noted a Dow Jones Newswire report that suggested Iran is in favor of closer contacts with Russia, Iraq and Venezuela on issues of oil. The Iranian report was attributed to Ali Akbar Velayati, a top adviser to the Islamic republic's supreme leader.
The news comes despite Iran's refusal last week to agree to a production cut, saying that it will wait for its production to return to pre-sanctions level of 3.7 million bpd before agreeing to abide by any plan to reduce output.
At 8 a.m. CT, NYMEX March WTI crude futures increased $1.00 to $30.88 barrel while ICE April Brent oil futures contract advanced $1.16 to $33.88 bbl.
In products trade, the NYMEX March ULSD futures contract jumped 4.53 cents to $1.0562 gallon. The NYMEX March RBOB futures contract bucked the upturn, easing 0.11 cents to $0.9997 gallon.
NYMEX ULSD futures climbed not only in sympathy with WTI but also ahead of another winter storm forecast to hit the Northeast region.
On Wall Street, stock indices were heading for a higher open, tracking oil prices and also on the back of positive economic data. ADP reported private employers added 205,000 jobs in January, surpassing an expected 190,000 jobs. That's an imperfect precursor to Friday's release of January nonfarm payroll report by the Bureau of Labor Statistics. Sustained jobs growth is a sign businesses are confident the economy would improve after a sluggish fourth-quarter 2015.
For the oil market, supply continues to drive trading. Traders are keeping a close eye for the impending EIA data.
API reported another higher-than-expected build in U.S. crude supplies during the week ended Jan. 29 and a larger-than-anticipated increase in gasoline stocks while distillates supply was within the range of estimates, sources said.
George Orwel can be reached at firstname.lastname@example.org
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