NEW YORK (DTN) -- New York Mercantile Exchange oil futures rose at the start of regular trade Tuesday morning after selling off Monday, as the market continues to consolidate within its recent trade range.
Tuesday's early advance was lent support by another look at Monday's monthly outlook by the Organization of the Petroleum Exporting Countries that detailed a sharp decline in OPEC production and showed cartel members were largely putting into effect production cuts they agreed to late last year that took effect on Jan. 1.
The upside for oil futures was limited however by growing supply levels in the United States. Analysts forecasted domestic commercial crude oil inventories that were last measured 8.1% above year prior increased another 4.0 million bbl for the week-ended Feb. 10.
Data for last week will be released by the American Petroleum Institute at 4:30 PM ET while the Energy Information Administration will issue its weekly report at 10:30 AM ET Wednesday.
At 9:00 AM ET, NYMEX March West Texas Intermediate futures were 61cts higher at $53.54 bbl and ICE April Brent crude futures gained 69cts to $56.28 bbl. NYMEX March RBOB futures climbed 2.76cts to $1.5722 gallon and NYMEX March ULSD futures rose 2.15cts to $1.6488 gallon.
The advance also comes ahead of Congressional testimony by U.S. Federal Reserve Chair Janet Yellen this morning and after the euro-zone's fourth-quarter 2016 gross domestic product was revised down to a 0.4% growth rate from an earlier estimate of 0.5%.
The U.S. dollar consolidated within Monday's trade range, with the greenback reaching a three-week high Monday in index trading. Fresh hawkish comments this morning by other Fed officials to the effect that the federal funds rate should be raised sooner rather than later could boost the dollar today.
OPEC in their Monthly Oil Market Report on Monday revised their expectations for global oil demand for 2017 up 35,000 bpd from month prior to an anticipated growth rate of 1.19 million bpd and consumption of 95.81 million bpd.
Citing secondary sources, the report showed OPEC crude oil production fell by 890,000 bpd in January to 32.14 million bpd versus December, reflecting 74% compliance with the 1.2 million bpd in production cuts the oil cartel agreed to on Nov. 30, 2016.
The compliance rate with the cuts was below the 90% cited by the International Energy Agency in their monthly Oil Market Report issued Friday (2/10), instigating profit taking led selling on Monday.
OPEC production cuts along with output cuts from 11 non-OPEC oil producing countries that also took effect on Jan. 1 are expected to narrow the global imbalance between production and demand in the coming weeks, although U.S. supply continues to build.
On Friday, data from Baker Hughes Inc. shows 66 oil rigs have been deployed so far this year, bringing the number of active oil rigs to 591 as of Feb. 10. EIA last reported domestic crude production at an 8.978 million bpd 10-month high.
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