Oil Futures Mixed on Economic Data

Oil Futures Mixed on Economic Data

NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved mixed at the start of regular trade Wednesday morning, with the RBOB contract shaking off overnight losses after the release of strong economic data and ahead of the Energy Information Administration's weekly petroleum supply report.

The Labor Department said the consumer price index advanced 0.6% in January, the biggest increase in four years, after a 0.3% rise, in December, with the CPI data coming after the department on Tuesday said producer price index also rose 0.6% last month.

Another data point from the Commerce Department showed retail sales rose by a more-than-expected 0.4% in January, while the Empire State Index, which measures manufacturing activity in the New York area, jumped to a two-year high of 18.7 points in January from 6.5.

These data points point to a strong U.S. economy that would boost oil demand growth, said analysts, but also are likely to bolster the U.S. Federal Reserve's case for tightening monetary policy.

Fed Chair Janet Yellen on Tuesday signaled a possible hike in the federal funds rate next month. In her upbeat comments on the economy during Congressional testimony, Yellen said the Fed would probably need to raise rates at the upcoming meeting, and she added that delaying the action could leave the central bank behind the curve.

The dollar index rallied to a near four-week high on those comments and continued higher this morning, further boosted by the CPI and retail sales data, with a stronger dollar pressing West Texas Intermediate oil futures lower.

Oil traders and speculative players are also focused on supply, with the oil futures complex falling overnight on a stronger dollar and industry data showing a bigger-than-expected domestic crude oil stock build and unexpected increases in refined products inventories.

The American Petroleum Institute reported Tuesday that U.S. crude oil inventories increased by 9.9 million bbl during the week-ended Feb. 10, more than double the 4.0 million bbl estimated, although crude supply at the Cushing hub in Oklahoma fell by a more than expected 1.27 million bbl.

API also reported gasoline inventories increased 717,000 bbl during the week reviewed while distillate fuel supplies posted a 1.5 million bbl stock build. A survey had shown the market expected stock draws of 700,000 bbl and 1.2 million bbl, respectively.

The Energy Information Administration is scheduled to release its weekly data at 10:30 AM ET.

In early trade, NYMEX March WTI futures were down 17cts at $53.03 bbl and the IntercontinentalExchange April Brent crude futures contract eased 18cts to $55.79 bbl. NYMEX March RBOB futures gained 0.63cts to $1.5530 gallon and the NYMEX March ULSD contract dipped 0.74cts to $1.6308 gallon.