NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures nudged higher Wednesday morning, consolidating gains from day prior on a supply disruption in Libya and ahead of weekly U.S. data from the Energy Information Administration that's expected to show stock draws for oil products and a stock build for crude oil.
Libyan National Oil Corp. said production has been reduced to 500,000 bpd from 700,000 bpd after a pipeline shipping crude from the country's largest oilfield, Sharara, halted operation Tuesday following clashes between different factions of militia groups.
When the idled pipeline would resume operation remains unclear but the incident raises the prospect of lower supply by the Organization of the Petroleum Exporting Countries despite the fact that Libya is exempt from the nearly 1.8 million bpd in production cuts agreed to last year by OPEC and their 11 non-OPEC allies.
It also seems a consensus is building for an extension of the output cuts beyond June, with OPEC likely to discuss the issue at a meeting scheduled for May. Russia and Iran have agreed to help stabilize the market, with Saudi Arabia waiting to see if global inventories fail to drop below their five-year average.
Oil futures upside was curbed by a stronger dollar and data from the American Petroleum Institute late Tuesday that showed crude oil stocks rose by 1.91 million bbl last week while gasoline supplies fell 1.1 million bbl and distillate supplies declined 2.04 million bbl.
The market was mixed on expectations for crude stocks although gasoline stocks were expected to have dropped by 2.1 million bbl and distillate supplies were projected to have declined by 1.25 million bbl.
The Energy Information Administration will release its weekly petroleum status report at 10:30 AM ET.
At 9:00 AM ET, May NYMEX West Texas Intermediate futures were 12cts higher at $48.49 bbl, off a $48.84 near two-week spot high and trading at a 52cts May/June contango, unchanged from a day prior.
IntercontinentalExchange May Brent crude futures gained 12cts to $51.45 bbl, off a one-week high of $51.87. In arbitrage trade, Brent's premium over WTI was unchanged at $2.96 bbl from Tuesday's close.
In products trade, NYMEX April ULSD futures edged up 0.85cts to $1.5252 gallon, and NYMEX April RBOB futures added 0.89cts to $1.6438 gallon.
In currency trade, the U.S. dollar index rose to a one-week high this morning, with a stronger greenback bearish for dollar-denominated commodities such as oil.
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