Oil Mixed in Wednesday Trade

NEW YORK (DTN) -- New York Mercantile Exchange (NYMEX) spot-month oil futures were mixed with a downside bias Wednesday morning, weighed down by a stronger U.S. dollar, Tuesday's selloff in major equity indices and technical pressure.

The dollar extended its gains versus six major world currencies for the fifth straight day, while the Dow Jones Industrial Average and S&P 500 index reversed up at the open after trading lower overnight on risk-off trade following Tuesday's losses.

Minutes of the Federal Open Market Committee's Jan. 30-31 policy meeting will be released later Wednesday. It's expected to show their thinking on the economy, inflation and expected interest rate hikes.

On supply, an early survey of analysts found mixed expectations, with some analysts estimating a crude stock draw of 3.5 million barrels (bbl) occurred last week while others estimate a build of 3.5 million bbl. On average, the analysts see total crude stocks holding steady at the prior week's level of 422.1 million bbl, while crude stocks at the Cushing, Oklahoma, supply hub that serves as the underlying delivery location for NYMEX West Texas Intermediate futures are estimated to have increased by 2.0 million bbl.

On produ cents, gasoline stocks are seen up 500,000 bbl while distillate fuels stocks are estimated to have declined by 750,000 bbl for the week ending Feb. 16.

The American Petroleum Institute (API) will release its oil statistics at 4:30 p.m. ET, delayed a day by Monday's observance of the Presidents Day holiday. The Energy Information Administration (EIA) will issue its data at 11 a.m. ET on Thursday.

The market remains concerned about rising U.S. crude oil production that's undermining efforts by the Organization of the Petroleum Exporting Countries (OPEC) and their 10 non-OPEC partners to rebalance the market.

U.S. crude production is expected to have increased again after Baker Hughes last Friday showed the number of active oil rigs were up last week by seven to a 798 near three-month high. During the week ending Feb. 9, crude production averaged at a 10.271 million barrels per day (bpd) record high, EIA data showed.

In early trade, April WTI crude futures down 22 cents at $61.57 bbl after the expiration of the March contract Tuesday afternoon. ICE April Brent crude futures eased 4 cents at $65.21 bbl. NYMEX March RBOB futures slipped fractionally to $1.7494 gallon and March ULSD futures edged up fractionally to $1.9352 gallon.

George Orwel can be reached at george.orwel@dtn.com