Oil Mixed in Wednesday Trade
NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures were mixed Wednesday morning as traders recalibrated their expectations ahead of the scheduled 10:30 a.m. ET release of weekly oil supply data by from the Energy Information Administration.
In early trade, NYMEX March West Texas Intermediate crude oil futures were 15cts higher at $64.62 bbl. March Brent on the Intercontinental Exchange eased 19cts to $69.77 bbl. NYMEX February ULSD futures inched up 0.40cts to $2.0901 gallon. February RBOB futures eased 0.61cts to $1.9026 gallon.
The modest gains for NYMEX WTI crude and ULSD futures followed data from the American Petroleum Institute released Tuesday afternoon showing a 3.6 million bbl crude stock drawdown at the Cushing, Oklahoma, delivery point for WTI, and a 1.3 million bbl stock draw for distillate fuels during the week-ended Jan. 19. RBOB was pressured by the API data showing a bigger-than-expected 4.1 million bbl gasoline stock build for the week profiled.
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The WTI futures gains were capped, however, by other bearish API data showing crude oil supply unexpectedly rose by 4.8 million bbl last week versus an expected stock draw of 3.25 million bbl. If confirmed by the EIA report, this would be the first crude stock build since the week-ended Nov. 10.
For the nine weeks ended Jan. 12, U.S. crude oil stocks declined by a combined 46.3 million, or 10.1% to 412.7 million bbl, 72.8 million bbl or 15.0% lower than a supply on-hand a year ago.
Also supporting the oil futures complex is a weakening dollar, with the U.S. currency trading to a three-year low versus six major world currencies. Treasury Secretary Steven Mnuchin said at the World Economic Forum in Davos, Switzerland, that the U.S. welcomed a weaker dollar.
On Tuesday, oil futures rallied on forecast for stronger economic growth in 2018 by the International Monetary Fund and the prospect of extended production cuts by the Organization of the Petroleum Exporting Countries and their non-OPEC partners spurred a rally.
Saudi Arabian oil minister Khalid al-Falih and his Russian counterpart Alexander Novak on Sunday said they were ready to extend the current 1.8 million bpd in production cuts by OPEC and 10 non-OPEC producers into 2019 if necessary. The two-year supply agreement is currently scheduled to expire at the end of this year.
The OPEC-led production cuts have helped to draw down oil inventories held by 35-member Organization for Economic Cooperation and Development. Signatories to the supply agreement achieved 107% rate of compliance in 2017, according to OPEC.
George Orwel can be reached at george.orwel@dtn.com
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