Oil Lower in Early Trade

NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved lower at the start of regular trade Wednesday morning as traders recalibrate their positions ahead of data from the Energy Information Administration that's expected to show stock builds for crude oil and product inventories for the week-ended Sept. 9.

EIA is scheduled to release its comprehensive inventory report for the week reviewed at 10:30 AM ET.

At last look, NYMEX October West Texas Intermediate crude futures fell 49cts to $44.41 bbl, off a $44.30 one-week low. November Brent futures on the IntercontinentalExchange declined 54cts to $46.156 bbl, off a $46.47 one-week low.

In products trade, NYMEX October ULSD futures fell 2.61cts to $1.3968 gallon, near a one-week low of $1.3947. NYMEX October RBOB futures were 1.04cts lower at $1.3661 gallon after inside trade.

The futures complex came under pressure Tuesday on the back of a bearish report from the International Energy Agency, but turned shallowly mixed overnight after the the American Petroleum Institute reported a smaller-than-expected crude oil stock build, a significant draw in gasoline supplies and a larger-than-projected distillate stock build last week.

The API report showed domestic commercial crude inventories increased 1.4 million bbl in the week-ended Sept. 9 versus an expected increase of 2.7 million bbl. This follows data for the prior week that showed huge draws that analysts attributed to disruptions caused by Hurricane Hermine in the Gulf of Mexico. The small crude stock build shown by API suggests deliveries didn't catch up following the disruptions as analysts expected.

On the products side, the API report showed a stock draw of 2.4 million bbl for last week while a stock build of 300,000 bbl was expected, and distillate supplies increased by 5.3 million bbl, more than an expected 2.0 million bbl build for last week.

IEA's Oil Market Report for September released Tuesday cut estimates for global demand growth this year by 100,000 bpd to 1.3 million bpd for a 96.1 million bpd consumption rate, with the slowdown in demand growth continuing through next year.

IEA said the Organization of Petroleum Exporting Countries was producing near a record high. OPEC output edged up to 33.47 million bpd in August, up 930,000 bpd year-over-year, as Saudi Arabia and other Middle East producers opened the spigots.

Saudi Arabia told OPEC it produced 10.63 million bpd in August, with Iraq reporting production of 4.638 million bpd and Iran saying it produced 3.63 million bpd, according to OPEC's Monthly Oil Market Report issued Monday.

OPEC has scheduled an informal meeting late this month in Algeria to discuss oil price stability, but the market doubts the group will agree to freeze output. More supplies from Libya are expected to hit the market over the coming weeks, according to a report.

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