Oil Mixed in Early Trade
NEW YORK (DTN) -- New York Mercantile Exchange oil futures were mixed at the start of regular trade Wednesday morning ahead of weekly government oil supply data, with West Texas Intermediate crude pressured by signs of rising crude oil supply in the United States.
However, the downside was limited by a stronger dollar and a report saying Iran could join other members of the Organization of Petroleum Exporting Countries in reigning in oil production next month.
The futures complex reacted in premarket trading to the supply statistics released Tuesday by the American Petroleum Institute for the week-ended Aug. 19. The API reported crude inventories jumped by 4.46 million bbl and oil product supplies fell during the week-ended Aug. 19.
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The U.S. Energy Information Administration is scheduled to release its more comprehensive data at 10:30 AM ET.
At 9:00 AM ET, NYMEX October WTI crude futures contract were 73cts lower at $47.37 bbl, while the October Brent contract on the IntercontinentalExchange was 48cts lower at $49.48 bbl.
In products trade, NYMEX September ULSD futures eased 0.42cts to $1.4976 gallon and September RBOB futures ramped up 1.05cts to $1.5093 gallon.
The oil futures complex settled higher Tuesday afternoon following a late rally spurred by a Reuters report that Iran was sending positive signals that it may support the anticipated coordinated action by OPEC and Russia to stabilize the oil market. The report raised hopes among oil futures speculators that OPEC will agree to freeze in oil production at an informal meeting set for Sept. 26-28 in Algeria.
The Wall Street Journal reported Iran has told OPEC that it will attend next month's meeting in Algeria. The potential Iranian support for a production freeze would suggest Tehran is reaching pre-sanctions production level, said analysts.
The market is also looking forward to Federal Reserve Chair Janet Yellen's speech at a meeting of bankers in Jackson Hole, Wyoming, on Friday for signs of the Federal Reserve's position on interest rates. Traders are pricing in a rate hike in the coming months, which explains the dollar's upside move this morning, with a stronger dollar bearish for oil futures.
George Orwel can be reached at george.orwel@dtn.com
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