Oil Ends the Day Mixed

Oil Ends the Day Mixed

NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled mixed this afternoon following a volatile session, with the crude contract rallying to a fresh high after the International Energy Agency said the global oil market was moving closer to a supply-demand balance.

However, traders booked profits, with crude futures paring gains and the products contracts settling shallowly mixed after a report out today said crude oil supply at Cushing, Oklahoma, the delivery point for the West Texas Intermediate contract rose during the week-ended May 10, said analyst Phil Flynn at Price Futures.

The report by intelligence firm Genscape showed a 548,923 bbl build at the Cushing hub during a week when roughly 1.0 million bpd in Canadian supply was offline due to wildfires in the Alberta oil sands region.

That crude typically flows to Cushing terminals, so a build there without that Canadian supply troubled some traders, Flynn said, and it coincided with reports some oil companies in Canada affected by the wildfires were starting to restore production that was disrupted over the past week and a half.

At settlement, NYMEX June WTI crude futures were up 47cts at $46.70 bbl, off a 6-1/2 month spot high of $47.02. July Brent crude oil futures on the IntercontinentalExchange settled 48cts higher at $48.08 bbl, off a near two-week spot high of $48.19.

In products trade, NYMEX June ULSD futures eased 0.27cts at $1.3940 gallon, reversing off a near two-week spot high of $1.4043. NYMEX June RBOB futures nudged 0.18cts higher to $1.5833 gallon, off a $1.5855 better than one-week high.

On Wall Street, equities were mixed ahead of their close while the dollar rose versus peer currencies.

Early today, IEA said greater oil production by the Organization of Petroleum Exporting Countries would more than offset a reduction in non-OPEC output. Still, the IEA in its Oil Market Report for May revised up global oil demand growth for the first quarter to 1.4 million bpd, led by strong gains in India, China, and Russia.

For the year, annual consumption growth is projected at 1.2 million bpd, with demand seen reaching 95.9 million bpd.

The IEA said global oil supply rose 250,000 bpd in April to 96.2 million bpd from the prior month. OPEC crude output rose by 330,000 bpd in April to 32.76 million bpd on a 300,000 bpd jump in Iranian flows and a boost in supply from Iraq. Iranian supply rose to 3.56 million bpd, a level last hit in November 2011. Saudi output was flat near 10.2 million bpd.

The IEA report also noted the drop in non-OPEC supply, citing the continued decline in U.S. production. The Energy Information Administration Wednesday reported U.S. crude stocks fell 3.4 million bbl last week, the first drawdown since March, and crude production declined 23,000 bpd to 8.802 million bpd for the week. Total products supplied over the last four-week period, a proxy for demand, averaged about 20.1 million bpd, up 3.5% from the same period last year.

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