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 mixed amid choppy trade Tuesday ahead of the 4:30 p.m. EDT release of weekly supply data from the American Petroleum Institute and Wednesday's 10:30 AM ET supply report from the Energy Information Administration.
Market consensus calls for the API and EIA to show domestic crude stocks dropped 2.9 million barrels (bbl) during the week-ended Friday, Aug. 10, with gasoline inventories seen lower by 800,000 bbl and distillate stocks expected to increase by 900,000 bbl. Refinery runs are expected to show a 0.4% decline to 96.2% of capacity.
"Typically, a normal inventory report would show crude stocks down about 1.5 million bbl for this time of year, so anything over that could be seen as somewhat bullish," said Stephen Schork, president of Villanova, Pennsylvania-based Schork Report. "All eyes right now are on the tomorrow's EIA report with the focus remaining on distillate supplies which have shown a somewhat steady increase over the past 6-7 weeks which is helping to ease some concerns we've seen the since the beginning of the summer."
The EIA reported distillate stocks at 125.4 million bbl as of Aug. 3, 22.3 million bbl, or 15.1%, below a year ago.
Traders are also keen to see if crude stocks at Cushing, Oklahoma, increased last week following 12 consecutive weeks of declines that drained inventory to minimum operating levels and to the lowest point since November 2014 at 21.803 million bbl. Analysts said the minimum operating level for Cushing is between 16 million and 22 million bbl.
Analysts said market uncertainty remains high amid multiple supply disruptions and concern over demand as Turkey's currency slides amid a heavy debt load, growing hostility to the West, and a strong U.S. dollar, with the greenback reaching a 13-month high in index trading against a basket of currencies.
On Monday, the Organization of the Petroleum Exporting Countries reported in their monthly outlook that Venezuela's crude production again fell, down 47,700 barrels per day (bpd) to 1.278 million bpd amid the country's economic collapse. Analysts expect Venezuelan crude output to slip below 1.0 million bpd near year's end.
OPEC also reported crude production in Libya fell to a 15-month low at 664,000 bpd, with Iran's output sliding to the lowest rate since December 2016 at 3.737 million bpd.
U.S. sanctions on Iran's purchase of U.S. dollars took effect Aug. 6, potentially hindering its oil trade since oil trades globally in U.S. dollar denominations. Additional U.S. sanctions, including on Iranian oil exports, take effect Nov. 4.
Saudi Arabia reported crude production in July at 10.288 million bpd, down 200,500 bpd from June. The Saudis had pledged to increase their output in June to contend with supply outages in Libya, Venezuela, and Nigeria, and the expected decline in Iranian output. However, the Saudis said in July there was no demand for the extra barrels.
September West Texas Intermediate crude settled 16 cents lower at $67.04 bbl, while Brent crude finished 15 cents lower to $72.46 bbl. September ULSD settled down 0.83 cent at $2.1287 bbl, while September RBOB gasoline rose 1.94 cents to a $2.0341-per-gallon settlement.
Brian Whary can be reached at firstname.lastname@example.org
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