NEW YORK (DTN) -- New York Mercantile Exchange oil futures opened lower Wednesday ahead of the release of the Energy Information Administration that's weekly oil supply that that's forecast to show stock draws.
The futures complex fell in pre-market after the American Petroleum Institute late Tuesday reported unexpected large builds in domestic crude and finished oil product stockpiles, raising fresh demand concerns. However, the futures downside was limited by a weaker dollar.
API said domestic crude oil stockpiles increased 2.2 million bbl in the week-ended July 8 versus a projected 3.7 million bbl stock draw. Gasoline supply climbed by 1.5 million bbl and total distillate stocks soared by 2.6 million bbl.
EIA is scheduled to release its more definitive weekly oil report at 10:30 AM ET.
At 9:00 AM ET, NYMEX August West Texas Intermediate crude oil futures fell 43cts to $46.37 bbl while September Brent crude on IntercontinentalExchange eased 58cts to $47.89 bbl.
In products trade, NYMEX August ULSD futures dropped 2.29cts to $1.4403 gallon while the August RBOB futures contract retreated 2.29cts to $1.4072 gallon.
On Wall Street, U.S. stock indices extended higher while the dollar eased further while the British sterling pound gained as political stability returns to the United Kingdom.
UK Prime Minister David Cameron is going to hand over power to Theresa May, who will today become the first female prime minister in 25 years, following former leader Margaret Thatcher. May will unveil her cabinet this evening including finance minister as well as the negotiator for Britain's exit from the European Union.
Those appointments will seek to reassure the market of policy certainty after the June 23 referendum.
Domestically, U.S. investor confidence on the U.S. economy has grown following last Friday's July payroll report showing a strong labor market. The report brightened the economic outlook which bodes well for demand, said analysts.
On the fundamentals, the International Energy Agency this morning said global oil market rebalancing of supply and demand is underway and adjusted higher its global oil demand growth rate for this year by 100,000 bpd.
In its monthly oil market report, the Paris-based IEA anticipates world oil consumption to increase at a 1.4 million bpd rate to 97.5 million bpd, boosted by robust demand in Europe. For 2017, the rate of global demand growth is expected to decelerate, projected to grow at 1.3 million bpd rate to 97.4 million bpd, the report said.
On Tuesday, the Organization of Petroleum Exporting Countries said it expects world oil demand growth this year at 1.2 million bpd, the EIA's
EIA's Short Term Energy Outlook for July raised estimates of global oil consumption by 26,000 bpd this year to 95.3 million bpd for an increase of 1.4 million bpd.
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