Oil Futures See Fresh Highs
Oil Futures See Fresh Highs
NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures extended gains Wednesday morning after the American Petroleum Institute on Tuesday reported bigger-than-expected stock draws for crude oil and refined products and ahead of the Energy Information Administration's corresponding statistics due later this morning.
The API report for the week-ended Oct. 27 detailed a 5.1 million bbl drawdown for crude oil inventories, with gasoline supply tumbling by 7.7 million bbl and middle distillate stocks down 3.1 million bbl.
A DTN survey estimated stock draws of 3.0 million bbl for crude, 1.75 million bbl for gasoline and 2.75 million bbl for distillates.
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The EIA's Weekly Petroleum Status Report due out at 10:30 AM ET will not only be scrutinized to see if its data confirm the API figures, but will also provide clues as to whether domestic crude oil production growth is slowing or accelerating. Baker Hughes, Inc.'s drilling data showed an increase of only one in the number of active oil rigs added to the nation's oil patch last week.
The futures complex has been supported in the past several weeks by bullish psychology driven by expectations that the Organization of the Petroleum Exporting Countries and their 10 allied nonmember producers would extend its agreement to cut crude production by 1.8 million bpd beyond the current March 2018 expiration timeline.
Ahead of OPEC's next policy meeting schedule for Nov. 30 in Vienna, Saudi Arabia and Russia have declared their support for extending the agreement for another nine months through December 2018, and OPEC Secretary General Mohammad Barkindo said recently that other OPEC members also support the extension plan.
Some analysts said the narrative of a rebalancing market could be replaced next year by one of tighter market supply.
Technical indicators show higher short-term trend for the spot-month futures contracts, with resistance at $55.61 bbl for NYMEX West Texas Intermediate crude futures and $65.80 bbl for Brent futures on the Intercontinental Exchange.
At 9:00 AM ET, NYMEX December WTI crude was 54cts higher at $54.92 bbl, off a ten-month spot high of $55.22. ICE January Brent was up 46cts at $61.40 bbl, off a 28-month high on the spot continuation chart of $61.70.
The Brent premium to WTI narrowed to $6.48 bbl, down from Tuesday's $6.98 bbl better than two-year high. A wider spread is an incentive for U.S. crude exports.
NYMEX December ULSD futures contract was 1.81cts higher at $1.8986 gallon, easing off a new 28-month spot high of $1.9030. The December RBOB futures contract was up 2.58cts at $1.7583 gallon.
(BAS)
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