Oil Advances in Early Trade

Brian L Milne
By  Brian L. Milne , DTN Refined Fuels Editor

CRANBURY, N.J. (DTN) -- Nearest delivered oil futures traded on the New York Mercantile Exchange advanced at the start of regular session trade Wednesday, reversing higher off of technical support, with the RBOB contract clawing back Tuesday's losses as refinery maintenance season quickly approaches.

Several refinery unit outages in Texas, including turnaround activity at Petrobras' 100,000 bpd Pasadena refinery, Phillips 66's 247,000 bpd Sweeney refinery, and the 211,000 bpd crude unit at Marathon's 451,000 bpd Galveston Bay refinery, are underpinning RBOB futures.

NYMEX February RBOB futures reversed off Tuesday's $1.5410 gallon 3-1/2 week spot low, finding technical support at the $1.5409 38.2% retracement point for the mid-November to Jan. 3 rally. The contract was up 2.2cts at $1.5687 gallon at 9:00 AM ET.

NYMEX February ULSD futures traded at a $1.6064 gallon five-week low on the spot continuous chart overnight after punching below retracement support at $1.6153 gallon. The contract reversed off the low, and was up 1.46cts at $1.6260 gallon.

NYMEX February West Texas Intermediate futures were up 33cts at $51.15 bbl at 9:00 AM ET after settling Tuesday at a $50.82 one-month low on the spot continuous chart, with retracement support found at $50.26 bbl.

March Brent crude on the IntercontinentalExchange were 46cts higher at $54.10 bbl, reversing off a $53.62 bbl one-month spot low, with retracement support found at $52.72 bbl.

The higher open comes ahead of the 10:30 AM ET release of weekly data from the Energy Information Administration, with the market expecting across the board supply builds to have occurred during the first week of 2017.

The market estimates a 1.5 million bbl build in domestic commercial crude supply, a 3.0 million bbl increase in distillate fuels inventory, with gasoline stockpiles expected to have gained 2.0 million bbl during the week-ended Jan. 6.

Late Tuesday, the American Petroleum Institute reported a 1.53 million bbl increase in crude inventory, a 1.69 million bbl build in gasoline stocks, and a much larger-than-expected 5.48 million bbl addition in distillate fuel stockpiles for the week reviewed.

Brian L. Milne can be reached at brian.milne@dtn.com


Brian Milne