Oil Extends Losses Wednesday
NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved lower at the start of regular trade Wednesday morning on data showing a larger-than-expected build in U.S. crude oil inventories, and on indications the Organization of Petroleum Exporting countries' planned production cut could be a non-starter.
The Energy Information Administration's weekly report is expected to be released at 10:30 AM ET.
At 9:00 AM ET, NYMEX December WTI crude oil futures were 91cts lower at $49.05 bbl, off a $48.93 two-week low on the spot continuation chart.
December Brent futures on the IntercontinentalExchange were down 97cts at $49.82 bbl.
NYMEX November ULSD futures were 1.63cts lower at $1.5468 gallon, near a three-week low of $1.5408. November RBOB futures have tumbled 3.08cts to $1.4663 gallon.
Late Tuesday, the American Petroleum Institute reported a 4.8 million bbl stock-build in domestic crude oil for the week-ended Oct. 21 versus an expected increase of 1.0 million bbl.
Supplies of gasoline rose 1.7 million bbl while middle distillates fell 949,000 bbl, according to the trade organization, versus consensus expectations for draws of 1.5 million and 2.2 million bbl, respectively.
There are growing doubts that an agreement on crude production cuts announced last month by the Organization of Petroleum Exporting Countries will get off the ground. OPEC members are still negotiating individual output quotas with exemption requests piling up.
Iraq said this past weekend that it wants to opt out of the deal due to low quota allocation, Venezuela and Indonesia have now demanded their own exemptions as well. Iran, Libya and Nigeria, already exempted from the deal may raise their output, reports said, adding pressure to the global supply glut.
OPEC wants to use secondary sources data, which put Iraq's output at 4.45 million bpd in September, to allocate quotas. However, Iraq wants the higher data Baghdad gave the OPEC secretariat, which shows 4.77 million bpd. Iraq is reportedly arguing it needs revenues to fight Islamic State terrorists.
George Orwel can be reached at george.orwel@dtn.com
(CZ)
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