Oil Higher Ahead of EIA Oil Report

NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved higher this morning as investors recalibrated positions ahead of the midmorning release of weekly oil inventory data from the Energy Information Administration followed by a policy statement from the Federal Reserve later in the afternoon.

The oil complex rose in early trade after the American Petroleum Institute reported a smaller-than-expected crude stock build occurred last week and the Organization of Petroleum Exporting Countries announced a meeting next month with non-OPEC producers in Qatar to agree on a plan to freeze production at January levels.

At 9 a.m. ET, NYMEX April West Texas Intermediate crude futures rose 58cts to $36.92 bbl, with options on the April WTI contract set to expire this afternoon. May Brent crude futures traded on the IntercontinentalExchange rose 61cts to $39.35 bbl.

In products trade, NYMEX April ULSD futures advanced 1.86cts to $1.1963 gallon while April RBOB futures edged up 0.49cts to $1.4131 gallon.

On Wall Street, equities were lower while the dollar rose to a four-day high ahead of the Fed's policy announcement later today.

Analysts don't expect a rate increase to be announced today, while investors are positioning for fresh guidance from the central bank on when interest rates are likely to rise. The Fed will also provide an outlook on the U.S. economy. Any signal there is more than one hike in store for this year would strengthen the dollar while anything dovish is likely to pressure the greenback, analysts said.

Ahead of that Fed announcement, new data shows the U.S. consumer price index fell 0.2% in February, but the core rose another 0.3%.

On supply, the API late Tuesday reported U.S. crude oil inventories increased during the week-ended March 11 by 1.5 million bbl, missing an expected 3.3 million bbl build. That total figure included a 471,000 bbl increase in crude inventories at Cushing, Oklahoma, the delivery point for NYMEX West Texas Intermediate crude oil futures.

On products, the API reported a 1.2 million bbl stock decline for gasoline, less than a projected 3.5 million bbl draw. Distillate stocks fell by 830,000 bbl, less than an expected 1.3 million bbl draw.

The Energy Information Administration is scheduled to publish its weekly oil report at 10:30 a.m. ET.

OPEC and non-OPEC oil producers have tentatively planned a meeting on April 17 in Doha, Qatar, to work out a deal on oil production aimed at stabilizing the oil market, a Reuters report quoting a statement from Qatari oil minister Mohammed Bin Saleh Al-Sada said. Fifteen OPEC and non-OPEC countries that account for 73% of global crude output are supporting the initiative, the report said. The April meeting will go ahead even without Iran, the report added.

Iran has said it won't freeze output until it reaches 4.0 million bpd. An OPEC report Tuesday showed Iran oil production in February at 3.385 million bpd while secondary sources report the figure at 3.132 million bpd. In January, Iran production was reported at 3.370 million bpd and by secondary sources at 2.944 million bpd.

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