NEW YORK (DTN) -- New York Mercantile Exchange oil futures were mixed Wednesday morning with RBOB lower while West Texas Intermediate crude and ULSD edged higher ahead of the Energy Information Administration's weekly oil data.
The EIA's data due at 10:30 AM ET and will be compared with the American Petroleum Institute's report late Tuesday that showed a larger-than-expected drawdown in crude oil and distillate inventories during the week-ended May 20. The API data boosted crude oil and ultra low sulfur diesel fuel and pressured RBOB futures on the MERC.
At 9:00 AM ET, NYMEX July WTI crude futures were up 62cts at $48.24 bbl, off a better than seven-month high of $49.45. The July Brent crude contract on the IntercontinentalExchange added 70cts to $49.31 bbl, off a three-day high of $49.39.
In products trade, NYMEX June ULSD futures advanced 2.22cts to $1.5109 gallon and June RBOB futures were 1.28cts lower at $1.6416 gallon.
On Wall Street, equities and a host of commodities advanced on risk-on trade despite the dollar rallying to a seven-week high. The broader market rally came after strong U.S. home sales increased the odds the U.S. Federal Reserve will raise interest rates at its June meeting.
The labor market has healed and inflation is moving towards the Fed's target of 2%, allowing the central bank room to hike rates. Greece also agreed with its creditors on debt relief today, easing concerns about growth in the Eurozone economy.
Demand for products is already improving ahead of Memorial Day holiday in the United States, which is the traditional start of summer peak driving season.
On supply, the American Petroleum Institute late Tuesday reported U.S. crude stockpiles fell by 5.1 million bpd versus an expected drawdown of 3.3 million bbl. API also reported a 2.9 million bbl decline in middle distillate fuels compared to a forecast 2 million bbl drop in supply.
On the bearish side of the ledger, API said gasoline stockpiles soared by 3.6 million bbl for the week against an expected 1.3 million bbl decline.
Traders are keen on U.S. crude production that has been falling in recent weeks. The U.S. crude supply decline and recent outages in Canada and Nigeria have helped reduce the global crude supply glut.
Companies operating in Canada's Alberta oil sands were restarting operations on Tuesday, working to return 1 million bpd in production closed due to wildfires since May 1. Most of Canadian from oil sands production is shipped to the United States.
In the Middle East and Africa, meanwhile, production by Iran and Iraq is rising while Libyan exports are recovering. The Organization of Petroleum Exporting Countries will hold its biannual summit in Vienna on June 2 and few analysts expect any agreement to reign in production.
George Orwel can be reached at email@example.com
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