Oil Mixed After EIA Trims Forecast

NEW YORK (DTN) -- New York Mercantile Exchange oil futures were little changed after seesawing earlier, as the market mulled the U.S. Energy Information Administration's Short-term Energy and Winter Fuels Outlook for October that trimmed the agency's global oil demand estimate for 2016 and 2017.

The agency projects global demand this year at 95.328 million bpd, revised down from 95.357 million bpd estimate published a month ago. For 2017, the EIA expects global demand to reach 96.674 million bpd, revised down from 96.78 million bpd estimated in September.

The STEO report also projects U.S. crude oil production will average 8.7 million bpd in 2016 and 8.6 million bpd in 2017. Projected production in 2017 is almost 100,000 bpd higher than previously forecast.

EIA is scheduled to release its weekly petroleum data later this morning that is expected to show a build for crude stocks during the week-ended Oct. 7, and declines in finished oil product stockpiles. Starting with this week's supply survey, the EIA will no longer include crude oil stored in tanks on lease lands in the total crude inventory data series. The change will reduce total crude stocks by an estimated 31 million bbl.

At last look, NYMEX November West Texas Intermediate crude oil futures were down 9cts at $50.09 bbl, and the IntercontinentalExchange December Brent futures contract 4cts lower at $51.77 bbl.

In products trade, NYMEX November ULSD futures were up 1.03cts at press time printing $1.5771 gallon and the November RBOB futures contract was trading 0.80cts higher at $1.4699 gallon.

Internationally, Chinese trade data released overnight showed a big increase in the country's crude oil imports.

Traders are also monitoring news from the Organization of Petroleum Exporting Countries regarding their efforts to corral support for a production cut. On Sept. 28, OPEC agreed to cut production but delayed implementation until November.

OPEC this week got Russia's commitment to freeze or cut its own output. Still, data showing higher OPEC output in September and a fresh dispute over production quotas for each member country suggest the scheme is not a done deal, analysts said.

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