NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures were shallowly mixed Friday morning, with West Texas Intermediate crude trading about a $1 below Thursday's $66.66 nearly 38-month high as the U.S. dollar stabilized after a recent sell-off.
The dollar dropped to a three-year low midweek after Treasury Secretary Steven Mnuchin welcomed a weaker greenback. However, his comments violated an unwritten rule that senior U.S. officials should always talk up the dollar. The dollar's steep decline stopped Thursday after President Donald Trump backed the greenback, although it remains within Thursday's trade range.
Since oil trades in dollar denominations, a weakening dollar typically boosts WTI futures.
At 9:00 AM ET, NYMEX March WTI crude oil futures were up 3cts at $65.53 bbl, and March Brent on the Intercontinental Exchange was down 27cts at $70.15 bbl after trading at a $71.28 nearly 38-month high on the spot continuation chart. WTI futures face technical resistance at $70.44 bbl and Brent at $77.75 bbl.
NYMEX February ULSD futures were up 0.16cts at $2.1170 gallon, and has since traded near Thursday's $2.1264 near three-year spot high with a $2.1251 intraday high. February RBOB futures eased 0.41cts to $1.9040 gallon, having dropped from Thursday's $1.9314 gallon nearly five-month spot high.
For most of the week, the market has been optimistic on the groundwork being laid to extend production cuts by the Organization of the Petroleum Exporting Countries and their 10 non-OPEC allies, and after data showed U.S. crude oil stocks declined for the 10th straight week through Jan. 19.
Russian and Saudi Arabian energy ministers on Sunday said the 1.8 million bpd in production cuts currently scheduled to run through the end of December could be extended into 2019.
In the United States, statistics issued Wednesday by the Energy Information Administration showed a 1.1 million bbl stock draw to a 411.6 million bbl better than 2-1/2 year low last week. Crude stocks at Cushing, Oklahoma, the delivery point for WTI crude oil futures, declined by 3.15 million bbl to a 39.244 million bbl three-year low, EIA reported.
However, the report also showed crude production rose by 128,000 bpd to 9.878 million bpd, the highest output rate in nearly five decades -- since 1970, while up 917,000 bpd versus a year ago. Baker Hughes will release its weekly oil rig-count data later Friday.
George Orwel can be reached at email@example.com
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