NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled higher Wednesday afternoon ahead of weekly oil supply data that is expected to show a U.S. crude stock draw and on bullish sentiment generated by signs the world's leading oil producing countries will adhere to their plan to curb oil production during the first half of this year.
A Schneider Electric survey showed oil analysts expect inventory data for the week-ended Dec. 30 to show a 2.8 million barrel (bbl) domestic crude stock drawdown, with gasoline supplies seen rising by 1.5 million bbl and middle distillate stockpiles projected to have increased by 1.2 million bbl.
Industry tracking firm Genscape said crude oil stocks at Cushing, Oklahoma increased by 1 million bbl last week.
The American Petroleum Institute is set to release its oil report at 4:30 p.m. EST while the Energy Information Administration will issue its corresponding report at 11:00 a.m. EST Thursday, with the weekly reports delayed by the New Year holiday.
The oil futures complex was also buoyed by a weakening U.S. dollar, with the greenback easing from a 14-year high despite the release of minutes of the Federal Open Market Committees December meeting that showed the pace of interest rate hikes could quicken this year.
The minutes showed many FOMC members thought a gradual increase in federal funds rate carries some risks. At that December meeting, the Fed boosted its benchmark rates by 25 basis points to a 0.50% to 0.75% range.
The dollar has recently rallied on the heels of a tightening monetary policy, but the U.S. currency turned lower early Wednesday and retreated further after the FOMC minutes were released Wednesday afternoon.
Expectations that leading oil producing nations will stick to their pact to cut production also boosted market sentiment. This follows comments by Kuwait Wednesday committing to reducing its output as part of the Organization of Petroleum Exporting Countries Nov. 30 deal to curb production by 1.2 million barrels per day (bpd) to rebalance the market.
The OPEC output cuts that kicked in this past Sunday, Jan. 1, will run through June 30. Eleven Non-OPEC producing countries agreed on Dec. 10 to cut 558,000 of their production in coordination with OPEC.
In late trade, NYMEX February WTI crude futures settled 93 cents higher at $53.26 bbl and ICE March Brent gained 99 cents to $56.46 bbl settlement. NYMEX February ULSD futures climbed 1.63 cents to $1.6930 gallon while February RBOB futures rallied $2.41 to a $1.6459 gallon settlement.
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