NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved mixed Tuesday morning, with May West Texas Intermediate crude paring losses after falling in the immediate aftermath of deadly terrorist attacks in Brussels earlier today.
The attacks in the city's subway and airport terminals concerned investors about overseas travel which could impact demand for jet fuel. However, the RBOB contract has since reversed fractionally higher as investors continue to reevaluate their positions.
"A terror attack in Brussels may slow momentum for oil as there could be a backlash on the demand side," said analyst Phil Flynn at Price Futures. "As details are filtering in about another terror attack, oil traders may pull back if they fear that this incident will cause a drop in demand. Yet if the market feels that this incident will have little impact on the psyche or travel arrangements of people, it may be sadly forgotten in the crude oil market. Oil dipped as the reports came in then seemed to recover and we will watch developments as the day goes on."
At 9 a.m. ET, the NYMEX May WTI crude oil futures fell 17cts to $41.35 bbl. The April WTI contract expired Monday. May Brent futures traded on the IntercontinentalExchange were down 10cts to $41.44 bbl.
In products trade, NYMEX April ULSD futures edged up 0.21cts to $1.2395 gallon while the April RBOB futures contract nudged up 0.68cts to $1.4657 gallon.
On Wall Street, major stock indices fell 0.5% in reaction to the tragic news from Belgium while the U.S. dollar strengthened to a three-day high, pressing down WTI futures.
The latest news from Brussels shows the city in lockdown following the attacks on the subway and at the airport. The city's mayor said 106 people have been injured in addition to nearly 30 reported dead, with updates to follow on the fatalities. The incident comes four days after authorities captured the mastermind of November's Paris attack.
Domestically, an early survey of analysts shows crude inventories are projected to have increased by 4.0 million bbl in the week-ended March 18. Gasoline supplies for the week are seen to have posted a 2.5 million bbl decline and distillate stockpiles a 1.5 million bbl drawdown.
The American Petroleum Institute is scheduled to release its weekly data this afternoon while the Energy Information Administration will release its data Wednesday morning.
Meantime, the market is uncertain over the outcome of the April 17 meeting in Qatar between Organization of Petroleum Exporting Countries and non-OPEC producers, which comes six weeks before the regular semi-annual OPEC meeting scheduled for June.
Several cartel members indicated they would participate in the plan to freeze output at January levels, but Iran won't participate in the freeze until its production reaches 4.0 million bpd. Analysts said the freeze may not rebalance the market any time soon since Russia, Saudi Arabia and Iraq were producing at record levels in January.
Technically, spot continuation charts indicate the medium-term trend remains up for all oil futures contracts, but analysts said the market is becoming overbought.
George Orwel can be reached at email@example.com
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