NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled higher this afternoon amid short-covering ahead of weekly petroleum supply data that's expected to show weekly oil product stock declines.
The gains were also underpinned by hopes Russia and the Organization of Petroleum Exporting Countries would agree to reign in supply at a meeting next month, which might lead to a market supply-demand rebalance in 2017.
"People are covering their short positions on concerns about what the API will report, and people are also rolling over to the December WTI contract," said analyst Phil Flynn at Price Futures. "WTI is holding above $50 per barrel (bbl), which is psychologically important, and if the API shows stock draws then we'll have a strong rally," Flynn believes.
A survey of analysts indicates U.S. gasoline and distillate fuel grades to fall and crude oil stockpiles to post an increase.
The American Petroleum Institute is expected to release its data at 4:30 PM ET, and the Energy Information Administration Wednesday morning.
NYMEX November West Texas Intermediate crude oil futures settled 35 cents higher at $50.29 bbl after inside trade, with the contract expiring at the formal session on Thursday, Oct. 20. The December contract settled up 25 cents at $50.62.
The December Brent futures contract on IntercontinentalExchange settled 16 cents higher at $51.68 bbl.
NYMEX November ULSD futures rallied 1.25 cents to $1.5686 gallon at settlement, and November RBOB futures advanced 1.33 cents to a $1.5057 at the regular session close.
OPEC should be able to reach a final deal in late November to curb oil production without too much disagreement about individual countries' output quotas, said Mohammed Barkindo, secretary-general of the cartel as the empty rhetoric continued to flow across the wire services. He added that he expects Russia to follow through on plans to cut its production. He said that efforts to cut output were driven by the need to restore market equilibrium before the second half of 2017. His comments were supported by Fatih Birol, head of the International Energy Agency, who said the market rebalancing may occur before the end of 2017.
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