Oil Mixed in Tuesday Trade

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures moved shallowly mixed Tuesday morning after overnight gains as the U.S. dollar pared losses. The market is looking for direction after trading at fresh lows Monday while weighing expectations for a weekly U.S. crude oil stock draw against technical pressure.

The dollar softened while the euro and the pound rose after fresh economic data showed Eurozone manufacturing grew at the fastest pace in six years and British manufacturing jumped to a three-year high in April. Those positive data are boosting the demand outlook and counter softer manufacturing data issued Monday by the United States and China, the world's two biggest consuming nations.

On supply, an early survey shows crude oil supplies for the week-ended April 28 fell 2.75 million bbl while gasoline fuel stocks are seen to have increased 250,000 bbl and fuel distillate supplies to have added 1.25 million bbl.

The American Petroleum Institute will release its weekly oil data on Tuesday afternoon while the Energy Information Administration's weekly data are due out Wednesday morning.

Recent EIA data have been bearish, with last week's report covering the week-ended April 21 showing total petroleum inventories rose more than 6.0 million bbl as total petroleum demand fell to just over 19.0 million bpd.

U.S. crude production at 9.256 million bpd has increased by 495,000 bpd year-to-date while up 327,000 bpd from a year ago. Domestic production is 568,000 bpd higher than the level seen in late November to early December when the Organization of the Petroleum Exporting Countries and their 11 non-OPEC partners agreed to cut production for six months effective Jan. 1.

The market now expects OPEC and their 11 non-OPEC producers to prolong their production cuts of 1.8 million bpd through December. The current production quota scheme expires in June and OPEC said last week that they've met their pledges with a compliance rate reaching 98% in March. OPEC is set to meet on May 25 and although they have made a good effort regarding compliance, they have so far failed to cut down a global oil surplus amid a relentless increase in crude production in the United States and elsewhere.

Libyan oil supplies are increasing following recent disruptions. Sharara oilfield restarted last week after being down since early April, and the Libyans are now ramping up output at El Feel that returned to service after the field was shut down in 2015. Libya's total production is now above 760,000 bpd, the highest level since December 2014, the National Oil Corp. said.

At last glance, NYMEX June WTI crude futures eased 8cts to $48.76 bbl with support holding at $48. IntercontinentalExchange July Brent crude was flat at $51.53 bbl, with support holding at $51.35 and the Brent premium over WTI widening 9cts to $2.77 bbl versus Monday's close.

In products trade, the NYMEX June RBOB futures contract was fractionally higher at $1.5322 gallon and the NYMEX June ULSD futures contract edged higher at $1.4882 gallon.

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