Oil Futures Move Lower
NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved lower at the start of regular trading Wednesday ahead of the release a report by the Energy Information Administration that is expected to show stock draws for crude and distillate supplies and a slight build for gasoline supplies.
The oil futures complex reversed lower in premarket trading amid profit-taking after Tuesday's report by the American Petroleum Institute showed an unexpected increase in domestic crude and distillate fuel inventories for the week-ended Nov. 11.
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API detailed a 3.65 million bbl crude stock build versus a projected 1.0 million bbl stock draw. Distillate fuel stocks unexpectedly jumped 2.98 million bbl while gasoline stocks eased 155,000 bbl, said API.
Oil futures also fell under selling pressure from a stronger dollar, with the dollar index at a one-year high on expectations the Federal Reserve will raise interest rates next month. The dollar also rallied because risk-averse investors seek safe havens in the U.S. currency and bonds.
At 9:00 AM ET, NYMEX December West Texas Intermediate crude futures were down 42cts at $45.39 bbl, leading up to WTI options expiration this afternoon. ICE January Brent futures were down 32cts at $46.63 bbl. NYMEX December ULSD futures slipped 1.01cts to $1.4338 gallon while December RBOB futures eased 0.71cts to $1.3279 gallon.
The Organization of Petroleum Exporting Countries remains in focus for most traders. On Tuesday, oil futures rallied on news OPEC was building a consensus for an agreement to cut output that would be ratified when they meet for the biannual summit in Vienna on Nov. 30.
However, a great deal of skepticism remains about the chances of a deal given the intractable differences between Saudi Arabia, Iran and Iraq. A fresh round of talks begins today thru Friday in Doha but the chances of a breakthrough are limited, analysts said. The stumbling block to a deal is how to share in the output cuts between OPEC members. Both Iran and Iraq want to raise their oil output while Saudi Arabia is calling for cuts to stabilize the market.
George Orwel can be reached at george.orwel@dtn.com
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