NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures moved higher on expectations U.S. crude supply declined for the fifth straight week, and on efforts by the Organization of the Petroleum Exporting Countries to rebalance the market.
However, the futures upside was curbed by a stronger U.S. dollar, with the greenback trading near a two-week high ahead of the White House's announcement of its choice for the next chairman of the U.S. Federal Reserve. The next central bank chief, who would replace dovish Janet Yellen, is expected to be hawkish.
After four straight weekly declines through the week-ended Oct. 13 to a 21-month low of 456.5 million bbl, crude oil inventories are estimated to have been drawn down again by nearly 3 million bbl during the week-ended Oct. 20, with gasoline stocks also estimated to have declined by 2 million bbl while distillates estimates are mixed.
The American Petroleum Institute will release its oil report for the week-ended Oct. 20 at 4:30 PM ET while the Energy Information Administration will issue its corresponding oil data Wednesday morning.
It comes as analysts speculate the U.S. oil shale boom is losing steam after oil services firm Baker Hughes, Inc. reported on Friday that the number of active oil rigs fell by seven to a 736 better than four month low, the third weekly drop in U.S. rig count.
Overseas, oil exports from Iraq's northern Kurdistan region rose to 300,000 bpd today, up from 200,000 bpd last week, although that's half the usual flow. OPEC is also reportedly working on a plan to extend production cuts through December 2018 and to ensure the market remains in balance in the years after that date.
Saudi Energy Minister Khalid al-Falih said today that the focus remains on cutting the global oil surplus to its five-year average.
But Bloomberg News said OPEC considers a good exit strategy from their current supply policy key to supporting oil prices in the long term. At the same time, the Saudi oil minister sees signs of slowing growth in U.S. shale oil production.
At 9:00 AM ET, NYMEX December WTI crude contract gained 30cts to $52.20 bbl while ICE December Brent crude contract climbed 27cts to $57.64 bbl. NYMEX November ULSD futures edged up 0.18cts to $1.7896 gallon and November RBOB futures were up 0.63cts at $1.6846 gallon.
George Orwel can be reached at firstname.lastname@example.org
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