Oil Futures End Mixed
NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled mixed Monday afternoon with West Texas Intermediate giving up most of its early gains while the ULSD and RBOB contracts posted losses of 0.8% about 1.3%, respectively, amid pressure from rising U.S. crude production and building inventories.
"The market rebounded early but the rally faded in the course of the day because U.S. production is back up above 10 million bpd and the rig-count jumped last week and now people are getting nervous about whether we can sustain these higher levels of supply," said Tom Bentz, vice president for energy derivatives at ABN AMRO.
He added, "Don't forget we are also expecting weekly crude stocks to have increased by 3.0 million bbl last week. We are in a period of correction as demand for crude is likely to be depressed by approaching refinery turnaround season."
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In its Monthly Oil Market Report released Monday morning, the Organization of the Petroleum Exporting Countries revised up its non-OPEC supply growth outlook. The cartel raised its non-OPEC supply estimate for 2017 by 70,000 bpd to 57.86 million bpd, representing growth of 860,000 bpd.
For 2018, the report hiked non-OPEC supply forecast by 320,000 bpd to an average of 59.26 million bpd, representing growth rate of 1.40 million bpd. The revisions were driven by expectations for higher production in the United States, among other countries.
Monday's OPEC report dovetailed with Baker Hughes's weekly report issued Friday that said the number of active oil rigs deployed to the nation's oil patch rose by 26 to a three-year high at 791.
Also Monday afternoon, the Energy Information Administration issued its monthly drilling report that projected tight shale oil production in seven key U.S. producing regions will average 6.756 million bpd in March, up 110,000 bpd or 1.6% from February, despite no change in productivity in the Permian Region for newly deployed drilling rigs.
NYMEX March WTI crude futures settled 9cts higher at $59.29 bbl, trimming gains after posting a high of $60.83, following Friday's six-week spot low at $58.07. April Brent crude oil on the ICE platform settled down 20cts at $62.59 bbl, reversing off a high of $64.40, after posting a two-month spot low of $61.77 on Friday.
NYMEX March ULSD futures settled down 1.62cts at $1.8389 gallon, reversing off a $1.8919 high, but off Friday's $1.8302 3-1/2 month spot low. March RBOB futures tumbled 2.17cts to a $1.6782 gallon settlement, reversing off a high of $1.7392, and off Friday's seven-week spot low of $1.6704.
George Orwel can be reached at george.orwel@dtn.com
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