NEW YORK (DTN) -- New York Mercantile Exchange oil futures edged higher at the start of regular trade Thursday morning in front of a weekly oil report by the Energy Information Administration due out at 11:00 AM ET that’s expected to show a decline in U.S. crude oil stockpiles.
At 9:00 AM ET, NYMEX February West Texas Intermediate futures were up 37cts at $51.45 bbl and March Brent crude futures on the IntercontinentalExchange 35cts higher at $54.27 bbl.
NYMEX February ULSD futures gained 1.13cts to $1.605 gallon and February RBOB futures eased 0.18cts to $1.5469 gallon.
The oil futures complex rebounded across the board overnight after the American Petroleum Institute issued a mixed report late Wednesday showing a bigger-than-expected U.S. crude stock draw coupled with an upward revision in global oil demand estimate for 2016 by the International Energy Agency.
The oil futures upside was limited, however, by a massive API increase in domestic gasoline stockpiles and an increase in estimated for U.S. shale output by the Paris-based IEA.
API showed a 5 million bbl crude stock draw for the week-ended Jan. 13, with a 1 million bbl crude stock draw at the Cushing terminal in Oklahoma, the delivery point for West Texas Intermediate crude.
The oil trade group said gasoline supplies soared 9.8 million bbl, with middle distillate stockpiles up 1.2 million bbl during the week profiled.
Globally, IEA’s January Oil Market Report revised up demand estimate by 100,000 bpd from a month prior. The agency now projects a year-on-year global consumption growth rate of 1.5 million bpd for 2016 based on stronger European demand. In 2017, however, the IEA expects the rate of growth for global demand to fall back to 1.3 million bpd, albeit this is above the average rate seen in this century of 1.2 million bpd.
On supply, IEA said it is still too soon to gauge compliance level of 1.758 million bpd in production cuts agreed to late last year by the Organization of Petroleum Exporting Countries and non-OPEC producing nations that kicked in this month.
However, the output cuts are boosting oil prices and encouraging high-cost producers to raise their output. In the U.S., IEA has anticipated for some time that tight oil production will increase in 2017, but the agency is now expecting an even larger increase of 170,000 bpd after a decline of nearly 300,000 bpd last year.
George Orwel can be reached at firstname.lastname@example.org
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