Oil Mixed in Early Trade
NEW YORK (DTN) -- New York Mercantile Exchange oil futures were mixed at the start of regular trade Thursday morning ahead of the U.S. Energy Information Administration's report that's expected to show domestic stock draws for crude oil and middle distillates while gasoline supply is expected to have held steady the week before Christmas.
The report covering the week-ended Dec. 23 is set for release at 11:00 AM ET, delayed a day by Monday's holiday.
Late Wednesday, the American Petroleum Institute reported a surprise build in commercial crude oil inventories while refined product stocks were drawn down more than expected. API, sources said, detailed a 4.2 million bbl crude stock build versus an expected draw of 2.2 million bbl, with supply at the Cushing delivery point for WTI in Oklahoma increased 528,000 bbl versus an expected draw of 500,000 bbl.
For products, the API data showed gasoline supply dropped 2.8 million bbl and distillate fuel inventories were drawn down 1.7 million bbl. A survey had projected a 200,000 bbl distillates stock draw.
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The oil futures complex has gained during this shortened trade week on supportive technical factors, positive economic data and supply and demand fundamentals that have boosted trader sentiment, but the upside has been capped by dollar strength. The greenback eased off one-week high in overnight trade, but remains near the highest level seen since 2003.
Bullish sentiment has been driven for weeks by recent agreements by members and non-members of the Organization of the Petroleum Exporting Countries to cut production by 1.758 million bpd effective Jan. 1 through June 30, 2017.
In addition, the Conference Board reported this week that its U.S. consumer confidence index rose to 113.7 this month, the highest since August 2001. On Dec. 22, the Bureau of Economic Analysis report U.S. gross domestic product grew at a 3.5% annualized rate, the quickest quarterly expansion rate in two years.
Some analysts believe that a strong economy would boost oil demand at a time when the anticipated oil production cuts would be taking excess supply out of the market, raising hopes for a rebalanced oil market sometime next year.
Other analysts are withholding judgement until OPEC members comply with the terms of their agreement, citing previous occasions when the oil cartel failed to fully implement their agreed to output cuts.
Trade volume is expected to be limited again today due to the holiday season, with some traders squaring their books for the year.
In early trade, NYMEX February West Texas Intermediate crude futures eased 10cts to $53.96 bbl. February Brent on IntercontinentalExchange was up 22cts to $56.44 bbl.
NYMEX January ULSD futures edged up 0.90cts to $1.6993 gallon, having rallied on Wednesday to a $1.7156 fresh 17-month spot high, and the February contract was up 0.80cts at $1.7251 gallon.
January RBOB futures rallied 2.22cts to $1.6968 gallon, off a 17-month spot high $1.7038, with February contract 1.96cts higher at $1.953 gallon.
NYMEX January oil products futures expire at Friday's close.
George Orwel can be reached at george.orwel@dtn.com
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