OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange continued lower in early trade on easing global supply concerns ahead of Wednesday’s 10:30 AM ET release of weekly supply data from the Energy Information Administration, following lower overnight trade as crude exports out of Nigeria were expected to increase, and a surprise build in U.S. crude oil and products inventories.
The American Petroleum Institute reported crude supplies rose 629,000 bbl during the week-ended July 13 with supply at the Cushing, Oklahoma hub down 1.34 million bbl. Trade sources said API data showed gasoline inventories added 425,000 bbl while distillate supply rose 1.71 million bbl. Analysts earlier forecast API to show a 3 million bbl decline in crude and drawdowns in finished oil product stocks.
On the global supply front, media reports indicate Venezuela is vowing to increase its oil production, though no specifics were available at press time, and Shell lifted force majeure restrictions on exports of its Bonny Light crude oil in Nigeria following two months of repairs to a 150,000 bpd pipeline. Reports also circulate that Iraq will be increasing oil production from its Kurdish production regions.
Analysts say if Wednesday’s EIA data confirms the API data set, prices could continue to tumble beyond current multi-week and multi-month lows.
“The market was surprised by the across the board build in crude and products especially as refiners continued to process crude at near record levels during the height of the driving season,” said Andy Lipow, president of Houston-based Lipow Oil Associates. “The market will now wait to see if the EIA data confirms or contradicts the API stats. If it does, the market could be targeting $65 bbl for WTI and $70 bbl for Brent.”
Near 9:00 AM ET, the NYMEX August WTI futures contract was down 52 cents bbl to $67.56 bbl, while the September contract slipped 41 cents to $66.75 bbl.
ICE September Brent, was 54 cents lower at $71.62 bbl, a fresh three-month low, while the October contract dipped 52 cents to $71.72 bbl.
NYMEX August RBOB futures were 1.13 cents gallon lower at press time printing $2.0148 gallon, and the August ULSD contract was posting a 1.34 cents decline at $2.0567 gallon.
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