Oil Opens Higher Ahead of EIA Data

NEW YORK (DTN) -- Spot-month New York Mercantile Exchange oil futures posted modest gains Wednesday morning ahead of the release of the weekly petroleum report by the U.S. Energy Information Administration that is now expected to show stock draws.

The new outlook reflects a recalibration of market expectations after the American Petroleum Institute late Tuesday showed stock draws for crude oil and refined products for the last week of April.

The API report indicated a 4.2 million bbl decline in domestic crude stockpiles versus expectations for a 2.75 million bbl drawdown.

API data reported gasoline stocks fell by 400,000 bbl and distillates by 1.9 million bbl. Pundits had projected a 250,000 bbl increase in gasoline held in storage and a better-than 1 million bbl build in distillate stockpiles.

The Energy Information Administration will release its corresponding Weekly Petroleum Status Report at 10:30 AM ET. The report will also show domestic crude production.

Oil futures came under selling pressure on Tuesday following a report by Reuters that said compliance by the Organization of the Petroleum Exporting Countries with their pledged production cuts fell to 90% in April from 92% in March.

That report triggered a technical selloff that ground to a halt after the release of API statistics.

The Reuters data, however contrasts with OPEC data, with the cartel reporting last week that compliance by OPEC and non-OPEC rose from 94% in February to 98% in March.

At 9:00 AM ET, NYMEX June West Texas Intermediate crude oil futures were 13cts higher at $47.79 bbl, and IntercontinentalExchange July Brent futures were up 19cts trading $50.65 bbl at press time.

NYMEX June ULSD futures edged up 0.5cts at $1.4730 gallon, and June RBOB futures contract advanced 1.53cts to $1.5289 gallon.

In currency trade, the U.S. dollar was higher in front of a decision this afternoon by the Federal Reserve on interest rates, with a consensus call for a rate hike that would boost the dollar and add pressure to oil futures.