NEW YORK (DTN) -- Spot-month New York Mercantile Exchange oil futures moved higher at the start of regular trade Friday morning, stabilizing in cautious early trade as the U.S. dollar eased off Thursday's 6-1/2 week high and ahead of a key weekly U.S. oil rig-count report.
The dollar eased as the euro moved higher with gains in opinion polls for Emmanuel Macron, a centrist candidate in the upcoming presidential elections in France. The currency market is also looking ahead to a speech this afternoon in Chicago by Federal Reserve Chair Janet Yellen amid expectations for a hike in federal funds rates when the central bank meets in mid-March.
Houston-based oil services firm Baker Hughes, Inc. will release its report on oil drilling activity for the week-ending today early this afternoon. Analysts expect the data to show another increase in the number of active rigs. Rigs have risen for six straight weeks to a 602 17-month high as of last week, adding a total of 77 so far in 2017.
The rig count is an indicator of domestic crude oil production.
The market came under pressure Thursday amid renewed concern over the relentless increase in U.S. crude output and inventories that are undermining production cuts by the Organization of Petroleum Exporting countries and 11 non-OPEC producers. U.S. crude production rose last week to a one-year high at 9.03 million bbl, with crude supply at 520.2 million bbl high, according to data by the Energy Information Administration issued on Wednesday.
Elsewhere, a Bloomberg survey showed OPEC production fell 65,000 bpd to 32.17 million bpd in February versus January figures, with Saudi Arabia cutting much deeper than its quota.
The survey showed the Saudis reduced their production by 90,000 bpd in February versus January to 9.78 million bpd, compensating for other producers such as Russia and Iraq that haven't fully complied with their agreements to cut supply.
Some analysts believe the futures oil market is overbought, with hedge funds accumulating long positions that could generate a stampede for the exits if the market breaks out of range-bound trade.
Gasoline crack spreads, a measure of refiner margins, are low despite the fact that many refineries have reduced runs for seasonal maintenance, said Tom Bentz, vice president for energy derivative at ANB AMRO.
In early trade, NYMEX April WTI futures were up 12cts at $52.73 bbl, reversing from Thursday's $52.57 three-week spot low.
IntercontinentalExchange May Brent crude futures rose 16cts to $55.24 bbl, reversing off Thursday's $55.04 three-week spot low. The ICE Brent premium over WTI was up 4cts at $2.51 bbl versus Thursday's settlement.
NYMEX April ULSD futures were up fractionally at $1.5801 gallon, off a three-month spot low of $1.5741 posted in premarket, and NYMEX April RBOB futures edged up 0.31cts to a $1.6464 gallon.
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