Oil Retreats in Early Trade

NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved lower at the start of regular trading Wednesday morning ahead of the release this morning of an Energy Information Administration report that's expected to show a build in crude oil supplies and stock draws for refined products for the final week of October.

The selloff followed an American Petroleum Institute report showing crude oil stockpiles spiked by a more-than-expected 9.3 million bbl during the week-ended Oct. 28.

Gasoline and distillate fuel stocks also fell by more-than-expected 3.6 million bbl and 3.1 million bbl, respectively, API added.

At 9:00 AM ET, NYMEX December WTI crude futures fell 73cts at $45.94 bbl, and ICE January Brent futures were 69cts lower at $47.45 bbl.

December RBOB futures opened 0.68cts lower at $1.4781 gallon while December ULSD futures dropped 3.61cts to $1.4808 gallon.

NYMEX December RBOB futures rallied 13% Tuesday after Colonial Pipeline's gasoline Line 1 was shut down after an explosion and fire in Alabama, but the contract gave back much of the gains late in the session, and reversed lower overnight after a company spokesman said the line could reopen this weekend.

Oil futures traders were also weighed down by reports of higher oil output from Libya and Nigeria. Nigerian oil production has recovered to 2.1 million bpd while Libya has doubled its production since mid-September to a reported 590,000 bpd.

On Wall Street, the dollar index fell to a three-week low ahead of the Federal Reserve announcement on interest rates this afternoon at the end of its two-day meeting. Expectations are the central bank will not raise interest rates at this time and might boost rates in December.

The market is also awaiting the Friday release of the October nonfarm payroll report, which is expected to show 175,000 jobs added to the economy.

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

(CZ)