Oil Futures Lower at Open Wednesday

OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange continued overnight losses in early trade Wednesday. Traders consolidated positions -- taking profits following Tuesday’s across-the-board futures rally and ahead of weekly supply data from the Energy information Administration expected at 10:30 AM ET Wednesday.

“With (API) supply data showing a large draw in crude and a build in distillates and with trading early Wednesday showing crude and distillates down, the market seems to be moving against the data,” said William Wilson, commodities broker with Washington, D.C.-based PowerHouse, a commodity hedge and trade risk advisory. “While there’s some news out there from Reuters about reduced Chinese imports, perhaps we’ll have to wait and see where the government (EIA) numbers come in. It looks like the market may drift a little lower ahead of the new (EIA) data, so if you have any price risk given the uncertainty out there right now, I would not want to be unhedged.”

Analysts estimate November oil sanctions on Iran could cuts exports from the third largest producer in the Organization of Petroleum Exporting Countries by between 500,000 bpd and 1 million bpd. Recent OPEC data shows Iran's June oil output at 3.799 million bpd, off 2.1 million bpd or 0.31% from 2017's 3.811 million bpd production level, while market watchers estimate Iran's July exports were between 2.7 million bpd and 3.0 million bpd.

Near 9:00 AM ET, the September NYMEX WTI contract stood $1.08 lower at $68.08 bbl, while the October ICE Brent contract was down 75 cents to $73.90 bbl. September RBOB futures were down 3.16 cents at $2.0724 gallon and the September ULSD contract was posting a 1.41 cents loss at $2.1550 gallon.

Brian Whary can be reached at brian.whary@dtn.com