NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved higher at the start of regular trade Wednesday morning after a new report from the Organization of Petroleum Exporting Countries raised the group's global demand forecast, with a weaker U.S. dollar furthering the oil complex's upside.
OPEC's Monthly Oil Market Report for August released earlier this morning boosted year-on-year demand growth estimate by 30,000 bpd and raised non-OPEC supply for 2016 by 90,000 bpd compared with estimates published last month. The report also cut OPEC's supply forecast for 2017.
The oil futures complex was mixed overnight after the American Petroleum Institute's report for the week-ended Aug. 5, was released late Tuesday and detailed a 2.1 million bbl build for U.S. crude oil inventories versus a projected a draw of 2.5 million bbl.
API reported gasoline inventories were drawn down by 3.95 million bbl, which was more than twice the expected 1.5 million bbl decline, and distillates fell 1.6 million bbl versus a 300,000 bbl projected build.
The Energy Information Administration will issue its weekly oil report at 10:30 AM ET.
At last look, NYMEX September West Texas Intermediate crude futures were up 16cts to $42.92 bbl, while October Brent crude on the IntercontinentalExchange was 27cts higher at $45.25 bbl.
In products trade, NYMEX September ULSD futures advanced 1.45cts to $1.3452 gallon and NYMEX September RBOB futures added 0.53cts to $1.3515 gallon.
In currency trade, the dollar fell to a near one-week low versus a basket of rival currencies, with a weaker greenback helping oil prices. The three main stock indices on Wall Street also rose on risk-on trade.
However, the oil market is fixated on supply and demand fundamentals. OPEC's Monthly Oil Market Report this morning showed demand this year for OPEC's crude oil would average 31.9 million bpd and at 33 million bpd in 2017. That reflects annual increases of 1.9 million bpd and 1.2 million bpd, respectively.
On Tuesday, EIA issued its August Short-term Energy Outlook that raised its estimates for global oil demand for 2016 by 16,000 bpd, projecting that consumption will grow at the rate of 1.4 million bpd to 95.308 million bpd. However, the STEO report cut estimates for 2017 demand by 25,000 bpd from levels published last month.
George Orwel can be reached at email@example.com
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