Oil Mixed in Friday Trade

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures moved shallowly mixed at the open of regular trade Friday morning ahead of a Baker Hughes, Inc. report due Friday afternoon that could show an increase in the number of rigs actively drilling for oil this week in the United States.

The market is little changed in front of the end of March and the first quarter, with the May IntercontinentalExchange Brent crude contract and April NYMEX RBOB and ULSD futures contracts expiring this afternoon.

Baker Hughes last week reported the rig count up for the 10th straight week, rising 21 to a 652 18-month high. On Wednesday, the Energy Information Administration showed U.S. crude oil production increased 18,000 bpd to 9.147 million bpd and total crude stocks rose to a 534.0 million bbl fresh record high during the week-ended March 24.

Oil futures have rallied this week on a Libyan supply disruption and after EIA data showed strong U.S. fuel demand and crude processing, with refinery utilization up nearly 2% to 89.3% last week. Gasoline demand increased 324,000 bpd versus the prior week and is up 3% year-over-year, while distillates demand increased 210,000 bpd last week while up 9.7% versus the same week in 2016, EIA data showed.

Oil futures remain vulnerable to the downside if U.S. crude production continues to increase, countering the effort by the Organization of the Petroleum Exporting Countries to reduce a global oil surplus. OPEC and 11 non-OPEC producers are in the early stages of discussions to extend their nearly 1.8 million bpd in production cuts through the rest of the year. The current quota scheme expires in June.

At last look, May NYMEX WTI futures were 17cts lower at $50.18 bbl, holding below Thursday's $50.47 three-week high on the spot continuation chart. May WTI is holding a 45cts discount to the June contract.

ICE May Brent crude futures fell 30cts for $52.66 bbl, edging off Thursday's three-week high of $53.10, with the June contract down 12cts at $53.01.

NYMEX April ULSD futures was fractionally up at $1.5594 gallon, with the May contract near flat at $1.5603. NYMEX April RBOB futures were up 0.38cts at $1.6850 gallon, with the May contract little changed at $1.6855 gallon.

George Orwel can be reached at george.orwel@dtn.com