Oil Lower in Wednesday Trade
NEW YORK (DTN) -- New York Mercantile Exchange (NYMEX) spot-month oil futures were lower Wednesday morning, with West Texas Intermediate extending Tuesday's technically-driven losses as the dollar surged to a four-day high and ahead of weekly oil data from the Energy Information Administration (EIA).
The market early in the week called for across the board supply drawdowns to have occurred during the week ended March 23, but have since adjusted their expectations, anticipating an inventory build at Cushing, Oklahoma, the delivery location for the WTI contract.
Expectations continue to call for a draw in U.S. commercial crude oil when the EIA releases their data at 10:30 a.m. ET, estimating a 1.5 million barrel (bbl) decline. The expected draw contrasts with the American Petroleum Institute's (API) weekly oil report released late Tuesday afternoon, with API reporting a 5.3 million bbl build. API said 1.7 million bbl of that build occurred at Cushing.
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API also reported gasoline stocks fell by 5.8 million bbl, more than twice the market expected, while distillate fuel stocks were drawn down by 2.24 million bbl, slightly less than estimated.
Globally, the Organization of the Petroleum Exporting Countries (OPEC) and 10 non-OPEC oil producing countries that are carrying out a two-year agreement that reduces their oil production 1.8 million barrels per day (bpd) from their October 2016 output rate are discussing extending their accord through the first half of 2019, Iraqi oil minister Jabbar al-Luaibi said. The current agreement ends at year end.
OPEC and non-OPEC ministers plan to meet April 10-12 while OPEC's biannual summit is scheduled for June 22 in Vienna.
At last look, NYMEX May WTI crude oil futures were down 74 cents at $64.51 bbl, having reversed this week from Monday's $66.55 two-month spot high.
Intercontinental Exchange May Brent crude fell 51cts to $69.60 bbl ahead of the May contract's expiration Thursday afternoon. June Brent fell 60 cents to $68.86 bbl.
NYMEX April ULSD futures edged down 0.75 cent to near $2.0140 gallon, with the May contract at near parity ahead of the April contract's expiration Thursday afternoon. April RBOB futures slid nearly 0.5 cent to just below $2.0100 gallon ahead of its expiration on Thursday, with the May contract trading at a roughly 0.5 cent premium to April.
George Orwel can be reached at george.orwel@dtn.com
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