Oil Climbs to New Highs

Oil Climbs to New Highs

NEW YORK (DTN) -- New York Mercantile Exchange oil futures gained for the sixth straight session Thursday morning, continuing to find support from data released Wednesday by the U.S. Energy Information Administration that showed steep draws for crude and gasoline for the week-ended Aug. 12. Oil futures are also higher on ongoing speculation the Organization of Petroleum Exporting Countries and non-OPEC would take action to stabilize oil prices next month and from a weaker dollar.

EIA on Wednesday detailed a 2.5 million bbl crude oil stock draw, a 2.7 million bbl decline in gasoline inventories and a 1.9 million bbl build in middle distillate stockpiles occurred last week. Refinery crude inputs rose 268,000 bpd to 16.865 million bbl during the week reviewed while implied gasoline demand fell 7,000 bpd to 9.762 million and distillate demand tumbled 449,000 bpd to 3.488 million bpd.

Internationally, OPEC plans to informally meet alongside a separate oil conference in Algiers on Sept. 26-28 to discuss ways to stabilize the oil market. Expectation is increasing among speculators that OPEC will coordinate a freeze or cut production, but some analysts are skeptical a deal would be reached between Russia, Saudi Arabia and the rest of OPEC's members since previous efforts failed.

After the regular session open, NYMEX September West Texas Intermediate crude futures were 67cts higher at $47.46 bbl, and have since traded at a $47.80 fresh five-week spot high. The October Brent contract on IntercontinentalExchange gained 34cts to $50.19 bbl, and traded at a near seven-week spot high of $50.41.

In products trade, NYMEX September ULSD futures rose 1.86cts to $1.5078 gallon, and have since rallied to a $1.5139 six-week spot high. The NYMEX September RBOB futures contract was little changed, edging up 0.67cts to $1.4572 gallon, off a near six-week spot high of $1.4635.

In currency trade, the U.S. dollar fell to a fresh seven-week low after minutes from the Federal Reserve's last policy meeting in July showed a split within the central bank, with some members voicing support for a rate hike "now or soon," but the majority said more data was needed before such action should be taken. A weakening greenback is bullish for oil futures since oil trades in dollars internationally.

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