NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled mixed with an upside bias Monday afternoon, with crude and ULSD higher and RBOB contract posting a loss.
West Texas Intermediate crude and ULSD rallied on support from higher equities markets, a report saying crude oil stocks fell last week at the Cushing, Oklahoma, supply depot and on the prospect the Organization of Petroleum Exporting Countries will cut production when they meet on Nov. 30 in Vienna for their biannual summit.
"Last week we saw how oil prices fell after reports said Saudi Arabia had threatened to raise its output if other OPEC members refuse to cut production, but the prices recovered after OPEC denied that story. That's what's helping to this market," said analyst Phil Flynn at Price Futures. "The stock market being up today is also boosting oil prices. Still, the market is nervous, so nobody wants to be short.
A rally in the U.S. dollar index had little bearing on market direction in crude oil futures Monday afternoon.
NYMEX December West Texas Intermediate crude oil futures settled 82 cents higher at $44.89 per barrel (bbl). ICE January Brent futures settled up 57 cents at $46.15 bbl.
In products trade, NYMEX December ULSD futures rallied 1.03 cents to $1.4406 gallon at settlement while NYMEX December RBOB futures contract settled 0.76 cent lower $1.3710 gallon.
NYMEX RBOB futures moved lower on confirmation Colonial Pipeline had successfully restarted its gasoline Line 1 in Alabama over the weekend after being down for a week after an explosion and fire on Oct. 31. The company repaired the line on Saturday before resuming gasoline flow on Sunday, although a full rate of flow is not expected for several days while pressure returns to the line.
On Wall Street, equities were higher on risk-on trade and the dollar gained on expectations the Federal Reserve will raise interest rates in December.
Domestically, an early survey of analysts by Schneider Electric showed total commercial crude oil stockpiles probably rose by an average of 200,000 bbl last week, but Cushing, Oklahoma, crude supplies are estimated to have fallen by 300,000 bbl during the week-ended Nov. 4. A survey by industry tracking firm Genscape estimated a Cushing crude stock draw of 442,000 bbl.
OPEC Secretary General Mohammed Barkindo said the group was committed to follow-through with the pledge made on Sept. 28 in Algiers to limit output to between 32.5 million and 33 million barrels per day. Analysts were divided over whether to believe OPEC statements. Many believe OPEC will come to an agreement, but think it will be a watered-down deal and have little impact on the market.
George Orwel can be reached at email@example.com
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