Oil Ends the Day Mixed

Oil Ends the Day Mixed

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled mixed with an upside bias this afternoon, with the West Texas Intermediate crude and RBOB contracts edging off highs after Libya said it would restart its oil pipelines after a two-year militant blockade ended recently.

The market now braces for U.S. oil inventory data for the week-ended Dec. 16 that's expected to show a stock draw for crude in the United States. A survey showed a forecast for stock draws of 2.0 million bbl and 1.0 million bbl for crude and distillates, respectively, with gasoline supplies seen increasing by 300,000 bbl.

The American Petroleum Institute weekly report is set to be issued at 4:30 PM ET followed by data from the Energy Information Administration due out at 10:30 AM ET Wednesday.

Trade volume was light and oil futures held within recent trading ranges, with traders squaring books in front of the expiration of the January WTI crude futures contract and ahead of the Christmas to New Year holiday season.

Earlier, oil futures were supported by increased geopolitical risks following what officials called terror-related attacks in Turkey and Germany. The deadly attack Monday on Russia's ambassador to Turkey was reportedly carried out by a gunman who wanted to avenge the killings in Syria. The Islamic State today claimed responsibility for the Berlin attack, which was also carried out late Monday.

"The attacks initially boosted prices just because we are sensitive to these reports when the market is getting tight, but these are not direct attacks on supply so they don't have as much power to move the market for long," said analyst Phil Flynn at Price Futures.

He added, "The most important news today was the Libyan resumption of pipeline operation after a long time, and so now we are just waiting for API data."

Meantime, Iraq advised its crude buyers to expect less supply next year as Baghdad prepares to comply with the terms of the Nov. 30 agreement by Organization of Petroleum Exporting Countries to cut output by 1.2 million bpd effective Jan. 1, 2017. Iraq will cut its exports by up to 210,000 bpd for an initial six months, which could be renewed for another six months.

At settlement, NYMEX January WTI crude futures expired 11cts higher at $52.23 bbl, off a $52.70 one-week high. The February WTI contract settled 24cts higher at $53.30.

On the IntercontinentalExchange, the February Brent crude oil futures contract settled 43cts higher at $55.35 bbl, trimming an advance to a one-week high of $55.92 posted earlier in the session.

In products trade, the NYMEX ULSD futures contract was little changed, settling fractionally lower at $1.6688 gallon and January RBOB futures gained 2.97cts to $1.5936 gallon, near a $1.5980 seven-week high on the spot continuation chart.

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