Oil Futures Mixed Ahead of EIA Data
NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures posted mixed results Wednesday morning ahead of weekly oil statistics from the Energy Information Administration that's expected to detail another commercial crude oil stock draw and domestic oil production growth.
The EIA's Weekly Petroleum Status Report for the week-ended Sept. 22 is due out at 10:30 a.m. EDT, and it follows Tuesday's data by the American Petroleum Institute that missed expectations for both crude and refined products.
The API showed crude oil stocks unexpectedly fell by 716,000 barrels (bbl) while gasoline stocks unexpectedly rose by 1.47 million bbl and distillate fuel supply tumbled by a more-than-expected 4.5 million bbl during the third week of September.
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The market will particularly scrutinize EIA's crude production data for a sense of whether the U.S. oil shale boom continues. Statistics for the week-ended Sept. 15 showed domestic output is back to pre-Hurricane Harvey levels.
Continued increases in U.S. output could erode bullish sentiment based on speculations that the global market is moving towards rebalancing since the Organization of Petroleum Exporting Countries and their 10 non-OPEC allies are said to be complying with their agreement to a 1.8 million barrel-per-day (bpd) production cut. There's consensus the OPEC-led output cuts will be extended beyond their March 2018 deadline, but no confirmation so far.
In addition, there were reports of a potential increase in Nigerian crude loadings after a force majeure on Bonny Light crude was lifted after a two-week downtime. The force majeure was declared on Sept. 16 due to issues at one of the two export pipelines, reducing Bonny Light exports to 161,000 bpd.
A stronger dollar exerted a downward pressure on oil futures. The greenback, which trades inverse to oil futures, rose to a four-week high versus its peer currencies on expectations the U.S. Federal Reserve will hike federal funds rates for the third time this year, probably in December.
Strong U.S. economic data this morning showing durable goods orders jumped by a more-than-expected 1.7% in August only solidified the feeling that the economy can withstand higher interest rates, and the dollar edged further up.
Technically, the Brent and West Texas Intermediate crude oil futures contracts are sideways and Brent contract continues to test resistance at $59.59, with WTI trading above $50.42 resistance. In arbitrage trade, the Brent premium over WTI is near a two-year high of $6.35 bbl, down 21 cents from Tuesday's close. October ULSD, RBOB and Brent futures markets remained in backwardation, which indicates strong short-term demand.
At 9:00 a.m. EDT, NYMEX November WTI crude was little changed, up 3 cents at $51.91 bbl while below the $52.43 five-month spot high posted Tuesday. November Brent crude on the Intercontinental Exchange fell 18 cents to $58.26 bbl, holding below the 27-month spot high of $59.49 posted Tuesday.
NYMEX October ULSD futures were little changed, up 0.60 cent to $1.8513 gallon but remains below Tuesday's 27-month spot high of $1.8646. The October RBOB futures contract dropped 2.30 cents to $1.6758 gallon.
George Orwel can be reached at george.orwel@dtn.com
(AG)
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