Oil Settles Higher Tuesday
NEW YORK (DTN) -- Spot-month oil futures on the New York Mercantile Exchange settled higher Tuesday afternoon ahead of industry statistics that are expected to show petroleum stock draws in the United States.
A survey of analysts showed an estimated 5.25 million bbl crude oil inventories for the week-ended Dec. 15 with stocks at the Cushing, Oklahoma delivery point for West Texas Intermediate crude estimated to have declined by 2.0 million bbl.
If confirmed by federal data, this would be the fifth consecutive draw in total crude supply and the sixth consecutive draw for crude stocks at Cushing, and the longest stretch of stock declines since July.
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The survey also shows gasoline stockpiles likely fell 1.4 million bbl while distillate fuel supply likely dropped 1.25 million bbl last week.
The American Petroleum Institute will release its weekly oil data today at 4:30 PM ET while the Energy Information Administration is scheduled to release its own weekly statistics at 10:30 AM ET Wednesday.
The oil futures complex was also buoyed by tension in the Middle East and news a North Sea crude pipeline shut a week ago won't be back in service until probably early January.
"The rally was partly due to that report saying the Forties pipeline will be down until January and it will keep the market well supported for some time," said analyst Phil Flynn at Price Futures.
The 445,000-bpd Forties crude pipeline remains shut one week after a crack was found in Scotland. Ineos, operator of the pipeline, today said repairs could take up to four weeks. Forties is one of the four crude streams feeding the international market Brent crude. The outage would keep the Brent market tight for many more weeks, said analysts.
On the geopolitical front, a missile was fired at Saudi Arabian capital Riyadh from Yemen, escalating tension in the Middle East region. The Saudis and Iranians are fighting a proxy war in Yemen and both are major oil producers and members of Organization of Petroleum Exporting Countries.
NYMEX January WTI crude oil futures expired 30cts higher at $57.46 bbl, with February contract settling 34cts higher at $57.56 bbl. The ICE February Brent contract settled 39cts higher at $63.80 bbl, trading at a $6.32 premium to WTI.
NYMEX January ULSD futures rose 1.47cts to $1.9399 gallon while January RBOB futures settled 2.41cts higher at $1.6966 gallon.
George Orwel can be reached at george.orwel@dtn.com
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