NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures continued higher Tuesday morning on expectation crude oil inventories in the United States declined for the 10th straight week and on an upward revision to economic growth forecast by the International Monetary Fund that implies greater demand for oil.
A DTN survey estimates U.S. crude oil stockpiles were drawn down during the week-ended Jan. 19 by 3.25 million bbl. Gasoline inventories are estimated to have increased by 2.25 million bbl while distillate stocks are expected to have decreased by 1.75 million bbl last week.
The American Petroleum Institute will issue its weekly supply report at 4:30 PM ET, with data from the Energy Information Administration set for release at 10:30 AM ET Wednesday.
The International Monetary Fund raised its forecast for world economic growth by 0.2% to 3.9% for both 2018 and 2019, saying the $1.5 trillion U.S. tax overhaul were likely to boost investment. The IMF expects U.S. Gross Domestic Product to expand at a 2.7% annualized rate in 2018 and 2.5% in 2019, up from the 2.3% the fund had forecast in October.
The prospect of extended oil production cuts by the Organization of the Petroleum Exporting Countries and their non-OPEC allies added to the gains for oil futures. Saudi Arabian energy minister Khalid al-Falih and his Russian counterpart Alexander Novak indicated on Sunday that they were working on a plan to prolong the current 1.8 million bpd in production cuts into 2019 in some shape or form.
The OPEC-led supply cuts implemented on Jan. 1, 2017 are set to expire at the end of 2018. Compliance with the supply agreement reached a record 129% rate for December and 107% rate for the entire 2017, OPEC said in a news release on Monday.
The optimism has led hedge funds and other speculative players to build on long positions in oil futures. Money managers added 51,179 crude oil futures contracts during the week of Jan. 16, data from the Commodity Futures Trading Commission shows.
At 9:00 AM ET, NYMEX March West Texas Intermediate crude oil futures advanced 52cts to $64.09 bbl, with the February contract having expired on Monday. March Brent crude contract on the Intercontinental Exchange gained 60cts to $69.63 bbl. Both WTI and Brent are overbought.
NYMEX February ULSD futures added 1.21cts to $2.0690 gallon. February RBOB futures climbed 1.67cts to $1.8968 gallon, having rallied earlier to a $1.9019 four-month, three-week spot high.
George Orwel can be reached at email@example.com
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