NYMEX Oil Futures Reverse Down

NEW YORK (DTN) -- New York Mercantile Exchange oil futures reversed an early advance Friday morning that was generated by a weakening dollar and the prospect of another weekly decline in the number of active oil rigs in the United States.

The market is volatile Friday -- the last day of trade for April -- with lingering concerns about oversupply weighing on prices, while a disappointing reading on consumer confidence reversed overnight gains. The choppy trade comes ahead of the afternoon expirations by NYMEX May RBOB and ULSD futures and June Brent futures on the IntercontinentalExchange.

"The market was up on momentum rally but when the University of Michigan consumer confidence came out the market took a leg lower because it showed people are not so confident about the economy," said analyst Phil Flynn at Price Futures Group. "But the big thing to look out for today is the rigs report."

Just ahead of the consumer confidence reading, NYMEX June West Texas Intermediate crude oil futures were 50cts higher at $46.53 bbl, off a fresh six-month spot high of $46.78. The ICE June Brent crude oil futures contract gained 15cts to $48.29 bbl, off a six-month spot high of $48.50.

NYMEX May ULSD futures rose 0.36cts to $1.4082 gallon, off a fresh five-month spot high of $1.4125. The June ULSD contract was up 0.29cts at $1.4106. NYMEX May RBOB futures increased 0.29cts to a fresh eight-month spot high of $1.6049 gallon. June RBOB contract rose 0.27cts to $1.6134.

On Wall Street, equities were lower this morning while the dollar fell to an eight-month low versus a basket of six rival currencies. The dollar's tumble is linked to concerns about the U.S. economy, with slowing growth dimming the prospect of another hike in the federal fund rate by the Federal Reserve in the short term. The Fed on Wednesday left rates unchanged while the Bank of Japan didn't expand stimulus on Thursday as the market expected.

This morning, the Commerce Department said personal consumer expenditures, excluding food and energy, barely grew, up 0.1% in March after an upwardly revised 0.2% in February. It comes after data showed U.S. gross domestic product grew during the first quarter by a less-than-expected 0.5% that some analysts said make it less likely the U.S. Federal Reserve will be able to raise benchmark interest rates this year.

Meanwhile, euro-zone GDP rose by an annualized rate of 0.6%, which was better than expected, although inflation fell 0.2%.

The market now awaits a weekly report by oil services firm Baker Hughes, Inc. that's expected to show a continued decline in the number of active oil rigs, which in theory would signal whether domestic oil production continues to fall. The Energy Information Administration on Wednesday said U.S. crude oil production fell by 15,000 bpd to 8.938 million bpd in the week-ended April 22, the seventh straight decline in domestic output.

While the Organization of Petroleum Exporting Countries is expected to continue pumping more oil, short-term disruptions to supply in Venezuela and Nigeria would take some oil out of the market, analysts said.

George Orwel, 1.718.522.3969, george.orwel@dtn.com, www.schneider-electric.com. (c) 2016 Schneider Electric. All rights reserved.