NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved higher Wednesday morning despite weak economic data released this morning and data issued Tuesday by an industry group showing a bigger-than-expected crude stock build for the week-ended April 29.
Traders are now recalibrating their expectations ahead of weekly oil supply data from the Energy Information Administration due out at 10:30 AM ET.
A production outage in Canadian oil sands operations in Alberta near the city of Fort McMurray caused by a nearby wildfire is driving early gains for oil futures. Suncor said its main plant located north of the city was safe, but the company reduced output to allow employees and families to evacuate the area.
At last look, NYMEX June West Texas Intermediate crude futures rose 75cts to $44.40 bbl while July Brent on the IntercontinentalExchange advanced 72cts to $45.69 bbl. NYMEX June ULSD futures rose 2.08cts to $1.3542 gallon while NYMEX June RBOB futures rose 2.13cts to $1.5313 gallon.
The American Petroleum Institute late Tuesday reported a 1.3 million bbl build for domestic crude oil inventories for the week-ended April 29 that surpassed an expected increase of 700,000 bbl.
API also reported a 1.2 million bbl gasoline stock draw that fell short of an expected decline of 1.5 million bbl for the fuel. Distillate supplies tumbled by 2.6 million bbl that easily trumped expectations for a 500,000 bbl drawdown.
Before the overnight gains, oil futures had come under pressure from Friday to Tuesday in response to rising output from the Organization of Petroleum Exporting Countries and data showing economic slowdowns in the United States and China.
On Wall Street, equity futures indices fell on risk-off trade after private payroll firm ADP said 156,000 jobs were added in April, which disappointed the market that expected 195,000 new jobs. ADP is an imperfect precursor for the federal payroll report due out on Friday. The rate of job creation has been the brightest spot for the U.S. economy, so the ADP data is one of the latest signs of slowing domestic growth.
Separately, an advanced estimate shows first quarter U.S. productivity down 1.0%, better than an expected 1.4% drop.
The dollar rose to a three-day high this morning versus peer currencies after bouncing off a 16-month low on Tuesday. The dollar was supported by comments from a U.S. Federal Reserve official who raised concern that investors had become complacent in their belief the Fed would hold interest rates steady. The official added that a rate hike could happen as early as next month.
However, the dollar's upside has since been capped after Bill Gross, a successful bond investor, speculated this morning that the Fed was likely to flood the market with money through a new stimulus program to jumpstart growth. A stronger dollar is bearish for oil futures and vice versa because oil trades in dollar denominations.
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