NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures were little changed Wednesday morning ahead of weekly oil data from the Energy Information Administration due out at 10:30 a.m. EDT.
Analysts and traders are now recalibrating their expectations after the American Petroleum Institute issued a mixed report late Tuesday showing U.S. crude oil inventories increased 1.78 million barrels (bbl) in the week-ended July 28. The reported stock build was unexpected, with a DTN survey projecting a draw of 2.8 million bbl.
The API data was bullish for products however, as it showed gasoline supply tumbled last week by 4.83 million bbl, surpassing a projected 1.3 million bbl stock draw. The API data also showed a 1.23 million bbl stock draw for middle distillate supply versus an estimated draw of 800,000 bbl for the week reviewed.
The market will closely scrutinize crude oil production data when the EIA report is published, with output up 640,000 barrels per day (bpd) this year through July 21 to a two-year high of 9.41 million bpd. Still, U.S. crude inventories have declined over the prior four weeks, down 25.8 million bbl since the end of June, EIA data shows.
Two recent surveys by media outlets found crude oil production by the Organization of the Petroleum Exporting Countries increased last month despite an agreement to cap output.
A Bloomberg survey showed OPEC crude production increased 210,000 bpd to 32.87 million bpd in July, while a survey by Reuters showed production by the oil cartel rose 90,000 bpd to a 2017 high of 33.0 million bpd in July, in part because Libyan output rose 180,000 bpd during the month to 1.025 million bpd.
"The added [OPEC] supply will reduce the size of the projected global supply/demand deficit and limit the impact on global petroleum inventories," said analyst Tim Evans at Citi Futures.
Next week OPEC, EIA and the International Energy Agency will release monthly outlooks for the global market that will include July OPEC crude oil production figures.
A weaker dollar supported oil futures, with the dollar index trading at a better than one-year low, with the euro rallying to a better-than-two-year high against the greenback.
In early trade, the NYMEX September West Texas Intermediate crude oil futures contract was flat at $49.16 bbl, off Tuesday's nine-week spot high of $50.43 bbl.
October Brent contract on the IntercontinentalExchange was 11 cents higher at $51.89 bbl. The Brent contract was holding a $2.73 bbl premium to WTI, up 11 cents versus Tuesday's close.
NYMEX September ULSD futures were also little changed, up 0.38 cent at $1.6451 gallon. September RBOB futures eased 0.48 cent to $1.6565 gallon, trading at an 11.12 cent premium to the October RBOB contract.
George Orwel can be reached at email@example.com
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