NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures rallied to one-week highs Wednesday morning ahead of the release of a report by the Energy Information Administration expected to show the fifth straight weekly decline in domestic crude oil stocks.
The EIA's Weekly Petroleum Status Report for the week-ended Dec. 15 is due out at 10:30 a.m. EST. It comes on the heels of API's report released late Tuesday that showed a 5.2 million-barrel (bbl) stock draw in domestic crude oil during the week-ended Dec. 15, which was in sync with market expectations.
The API also reported domestic distillate fuel supplies drawn down by a more than expected 2.9 million bbl, with gasoline supplies unexpectedly rising by 2 million bbl.
The oil futures complex also was supported by the continued outage of Forties crude oil pipeline system in the North Sea, more than one week after a crack was found at a section of the pipeline near Aberdeen, Scotland.
Goldman Sachs forecasts the global oil market will rebalance by mid-2018 as strong demand combines with Organization of Petroleum Exporting Countries output cuts.
One obstacle to its forecasts is rising U.S. oil production. The EIA's Short Term Energy Outlook last week forecast domestic crude to rise by an average of 800,000 barrels per day (bpd) and above 10 million bpd by mid-2018, which would be a record and would take U.S. output closer to production levels of Saudi Arabia and Russia.
At 9:00 a.m. EST, NYMEX February WTI crude futures were 31 cents higher at $57.87 bbl, near a one-week high of $57.93 with the January contract having expired on Tuesday. The ICE February Brent contract was 33 cents higher at $64.13 bbl, closing in on a one-week high of $64.19 trading at a $6.26 premium to WTI.
In products trade, NYMEX January ULSD futures edged up 0.93 cent to $1.9492 gallon, close to a $1.9508 one-week high. January RBOB futures gained 1.72 cents to $1.7138 gallon, approaching a $1.7158 one-week high.
George Orwel can be reached at firstname.lastname@example.org
© Copyright 2017 DTN/The Progressive Farmer. All rights reserved.