OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled higher in choppy trade Tuesday, as this week's oil supply report from the American Petroleum Institute is expected to show another decline in U.S. commercial crude oil inventories.
Rising prices also come amid media reports of continued protests at Iraq's Zubair oil field and on reports Libya's National Oil Corp declared force majeure on oil loadings at its Zawiya port Monday following recent attacks and a kidnapping at its Sharara field causing production declines totaling 125,000 barrels per day (bpd).
Supplies from Venezuela also are set to decline as much as 700,000 bpd over the next several weeks, according to Reuters, as four crude upgraders go down for scheduled maintenance.
Tuesday's 4:30 p.m. EDT API weekly supply report comes on the heels of earlier reports from the Energy Information Administration for the week ended July 6 showing a bullish 12.6 million barrels (bbl) of supply drawn from U.S. commercial crude inventories.
"We had one heck of a selloff yesterday on talk of trade tariffs, a potential SPR release as well as Libyan production coming back online but we haven't really heard much more about that," Elaine E. Levin, CEO and Chairman of Washington, D.C.-based PowerHouse, a commodity hedge and trade advisory told DTN MarketWire earlier Tuesday. "We're looking once again for draws in crude oil and that will be our next hurdle. We're also hearing from clients about reports of excellent gasoline sales. If we continue the draws it may lend some support to the market."
West Texas Intermediate crude oil declined $2.95 bbl Monday to $68.06 bbl, testing and breaching key $70 bbl support levels and falling to its lowest price since June 20 at $67.03 bbl. Brent crude slumped to a three-month low of $71.84 bbl amid media reports that the U.S. may consider waivers on a case by case basis for limited purchases of Iranian oil, coupled with reports the U.S. may tap into the 600 million bbl Strategic Petroleum Reserve.
At the 2:30 p.m. settlement, NYMEX August West Texas Intermediate crude futures settled 2 cents per bbl higher at $68.08 bbl, finishing below key support at $70 bbl for a second day. ICE September Brent crude futures settled 32 cents per bbl higher on the day to $72.16 bbl, and its weakest price in more than three months.
August RBOB gasoline futures ramped up 2.39 cents per gallon to $2.0261 gallon at settlement, and the August ULDS contract finished formal session trading up 1.58 cents at $2.0701 gallon.
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