Oil Ranges Higher Tuesday
NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures ranged higher Tuesday afternoon, with West Texas Intermediate crude settling at a six-month high above $52 bbl ahead of inventory reports expected to show stock draws for crude and gasoline in the United States.
The American Petroleum Institute report due this afternoon is seen showing a 3 million stock draw that would be the fifth straight weekly stock decline. As of the week-ended Oct. 13, total crude stocks had fallen to a 21-month low of 456.5 million bbl. The Energy Information Administration will issue its corresponding oil data Wednesday morning.
The oil futures rally was also underpinned by bullish comments from Saudi Arabia that suggested Organization of the Petroleum Exporting Countries will do whatever it takes to end the global oil glut and keep the marker in balance.
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Saudi Energy Minister Khalid al-Falih said today that his focus remains on reducing surplus in developed nations to their five-year average, and he raised the prospect of continuing to reining in oil production longer.
OPEC and ten non-OPEC producers have cut oil output by 1.8 million bpd since January. The production agreement runs to March 2018, but they are considering extending the supply cuts by nine months to December 2018.
What happens after that timeline remains unknown, but al-Falih's comments suggested the Saudis are seeking a long-term solution, said analyst Phil Flynn at Price Futures. At the same time, the Saudi oil minister sees signs of slowing growth in U.S. shale oil production.
Meanwhile, 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.
Oil futures upside was curbed however by a stronger U.S. dollar, with the greenback trading near a two-week high on expectation President Donald Trump will nominate a hawkish economist to be the next chairman of the U.S. Federal Reserve, replacing the dovish Janet Yellen.
NYMEX December WTI crude settled 57cts to $52.47 bbl, the highest settlement since April 17, after trading to near a one-month high of $52.55. ICE December Brent crude contract settled up 96cts to $58.33 bbl at settlement, near a four-day high of $58.38. NYMEX November ULSD futures rallied 3.143cts to $1.8221 gallon, off a one-week high of $1.8240. November RBOB futures were up 3.72cts at $1.7155 gallon at settlement, near a one-month high of $1.7181.
George Orwel can be reached at george.orwel@dtn.com
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