Oil Futures End Tuesday Near Flat

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures ended little changed Tuesday afternoon following a choppy session. A weaker U.S. dollar weighed against soft equities and a bearish forecast by the Energy Information Administration.

The dollar slumped to a one-week low, while the Dow Jones Industrial Average chopped on either side of unchanged in volatile trading, with many in the market concerned over President Donald Trump's intention to slap tariffs on imported steel and aluminum. U.S. Senate Majority Leader Mitch McConnell this afternoon said he was worried about a trade war that could jeopardize economic growth if Trump imposes the tariffs.

At the noon hour New York time, the EIA released its Short-term Energy Outlook for March trimmed expected global oil demand while raising the agency's supply forecast for the United States and other producers that aren't part of the Organization of the Petroleum Exporting Countries.

The STEO projects world consumption would increase at an annual rate of 1.7 million bpd in 2018 to 100.2 million bpd and by 1.725 million bpd to 101.925 million bpd in 2019. That reflects downward revisions of 26,000 bpd for 2018 and 21,000 bpd for 2019 versus last month's estimates.

In their STEO, EIA forecasts U.S. output at a 10.7 million bpd record high for 2018, up 1.4 million bpd from 2017, which reflects a 100,000 bpd upside revision from last month. Non-OPEC supply is expected to grow at a 2.51 million bpd annual rate to 61.18 million bpd this year, revised up 140,000 bpd versus last month's estimate.

EIA projects OPEC production would average 32.47 million bpd in 2018, up 30,000 bpd from 2017, and at 32.73 million bpd in 2019, up 260,000 bpd from this year.

A survey Tuesday estimates an average U.S. crude oil stock build of 2.75 million bbl for the week-ended March 2. However, crude stockpiles at the Cushing delivery depot in Oklahoma, are estimated to have been drawn down by 2.0 million bbl during the week reviewed. Supply changes at Cushing are closely watched since Cushing serves as the underlying delivery location for NYMEX West Texas Intermediate crude oil futures. Domestic gasoline supply is expected to have declined by 2.0 million bbl, while distillate inventory is estimated to have been drawn down by 2.75 million bbl.

The American Petroleum Institute is set to release its weekly oil data at 4:30 PM ET and EIA's weekly oil report is due out at 10:30 AM ET Wednesday.

NYMEX April WTI crude futures settled little changed, up 3cts at $62.60 bbl, paring gains from a $63.28 four-day high. Intercontinental Exchange May Brent crude contract was up 25cts at a $65.79 bbl settlement, settling just above a $3.00 bbl premium to WTI.

NYMEX April ULSD futures settled up 0.66cts at $1.9033 gallon, while April RBOB futures ended was down 0.18cts at $1.9331 gallon, reversing off a $1.9443 five-week spot high.

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