Oil Futures Settle Lower
NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled lower Tuesday afternoon on technically-driven selling pressure and prepositioning ahead of weekly data from the American Petroleum Institute that's expected to be bearish on crude oil.
"There is concern about the potential impact of the Atlantic storms, but the key thing is traders are positioning themselves before the API report, which we think will show a big crude stock build," said analyst Phil Flynn at Price Futures in Chicago.
A DTN survey of analysts Tuesday showed expectations for a 4.0 million bbl crude stock build for the week-ended Sept. 15, with Cushing, Oklahoma, crude supply seen up 500,000 bbl.
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The API's data is due out at 4:30 p.m. EDT while the Energy Information Administration is scheduled to release its statistics at 10:30 a.m. EDT Wednesday.
Hurricane Maria is now causing damage in the Caribbean and traders are concerned given the recent experience with hurricanes Harvey and Irma that temporarily reduced demand.
The National Hurricane Center's current storm tracking model shows Maria could take an eastward path to Florida's Atlantic coast, but the storm also could change direction and head towards the Gulf Coast. To the north, Hurricane Jose brought big waves to the mid-Atlantic and New England coasts.
Traders also were position squaring in front of the expiration of the October West Texas Intermediate crude futures contract on Wednesday afternoon (9/20), said analysts.
"This [market weakness] is most likely some profit-taking after six days in a row higher," said David Thompson, executive vice president at Powerhouse, a brokerage firm in Washington, D.C.
NYMEX October WTI crude contract settled 43cts lower at $49.48 after testing resistance at $50.42. The November WTI contract was down 45cts at $49.90 bbl. November Brent crude on the Intercontinental Exchange settled down 34cts at $55.14 bbl, settling at a $5.26 bbl premium to WTI.
NYMEX October ULSD futures settled down 0.70cts at $1.7726 gallon, reversing from a $1.7924 better than two-year spot high. October RBOB futures declined 1.36cts to a $1.6550 gallon settlement, settling at a 4.91cts gallon premium to the November contract.
Earlier, oil futures rose after Iraq indicated they could support an agreement extending oil production cuts by the Organization of the Petroleum Exporting Countries. There is support within OPEC for deepening the current 1.2 million bpd cuts by 1%.
George Orwel can be reached at george.orwel@dtn.com
(AG)
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