Oil Up in Early Trade
NEW YORK (DTN) -- New York Mercantile Exchange oil futures advanced at the start of regular trade Wednesday morning after closing down Tuesday, continuing recent price swings ahead of data by the U.S. Energy Information Administration that could show stock declines in domestic petroleum supplies.
Traders are recalibrating their views about the current domestic supply disposition after the American Petroleum Institute late Tuesday showed declines in crude oil and products held in U.S. storage during the week-ended Sept. 23.
API reported crude stocks fell 752,000 bbl, gasoline supplies tumbled 3.7 million bbl and distillate fuel stockpiles eased by 343,000 bbl last week. A survey by Schneider Electric showed the market expected crude stocks to increase by 3.25 million bbl, gasoline supplies to drop by 750,000 bbl and distillate fuel stocks to fall by 250,000 bbl for the week reviewed.
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The EIA is scheduled to release its weekly oil supply data this morning at 10:30 AM ET.
Also lending support, the market sees signs of a potential compromise by key members of the Organization of Petroleum Exporting Countries that would lead to a November agreement to rein in oil production.
At last look, NYMEX November West Texas Intermediate crude oil futures added 52cts to $45.19 bbl. ICE November Brent futures advanced 62cts to $46.59 bbl. The NYMEX October ULSD futures contract rose 1.81cts to $1.4280 gallon. NYMEX October RBOB futures jumped 3.74cts to $1.4311 gallon.
OPEC is holding informal talks in Algiers to find ways to rid the oil market of oversupply. Saudi Arabian and Iranian oil ministers indicated they don't expect an agreement today to cut or freeze production.
The two OPEC nations failed to find common ground on production levels during preliminary consultative discussions over the past several days, but there are signs a future deal is possible.
The Saudis initially offered to cut oil production to their January output rate of 10.23 million bpd in exchange for Iranian output freeze at current level of nearly 3.7 million bpd. The Iranians rejected the offer, saying they intended to raise their production to a previously announced target of 4.0 million bpd.
Overnight, Saudi oil minister Khalid al-Falih signaled it could further sweeten its offer, telling wire agencies that Iran, Nigeria and Libya would be allowed to produce at "maximum levels that make sense" as part of a possible agreement to curb output when OPEC holds its regularly scheduled biannual summit in November in Vienna.
George Orwel can be reached at george.orwel@dtn.com
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