Oil Futures Close Mixed Thursday

OLD BRIDGE, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest to delivery and Brent crude on the Intercontinental Exchange settled mixed Thursday, with the West Texas Intermediate contract ending higher after bouncing off support and as traders doubt Wednesday's reported high import figure. U.S.-China discussions later this month also lent upside support, while RBOB futures declined for the second straight session.

"I think the thing that really made a difference today is that we're talking to China so as a result the anxieties and fears about a trade war have been put aside for at least a day," said Al Levine, CEO and chairman of Washington, D.C.-based Powerhouse, a commodity hedge and trade advisory.

The United States and China will hold lower-level trade talks in August, offering hope that an escalating trade war between the world's two largest economies can be averted. The U.S. has recently threatened to impose additional tariffs on Chinese goods amounting to $200 billion, while China announced retaliatory tariffs.

News that Turkey will allow people to take the lira out of the country was also mentioned as contributing to higher futures prices, specifically Brent. Turkey's currency has been sharply devalued amid a trade dispute with the United States.

Market participants are also skeptical of a 9.014 million bpd U.S. crude import rate for the week ended Aug. 10, reported Wednesday by the Energy Information Administration.

"Traders are scratching their heads as to where all the imports came from," said Dan Flynn, senior analyst with Chicago-based Price Futures Group. "They didn't come from Canada, so the bottom line is we don't believe the numbers that came out for imports and we're looking for EIA to issue a revision. That number of imports is unlikely."

The import rate, the third highest of 2018, was up 1.083 million bpd from the previous week, contributing to an unexpected 6.8 million bbl build in commercial crude stocks. The large build coincided with near record high refinery demand at 17.981 million bpd while the utilization rate jumped 1.5% to a 98.1% 20-year high.

NYMEX September WTI futures settled up 45cts at $65.46 bbl, reversing off a $64.43 fresh two-month low on the spot continuous chart, with support at the $64.39 200-day moving average.

ICE October Brent futures settled up 67cts at $71.43 following inside trade, holding above Wednesday's four-month spot low of $70.30.

NYMEX September ULSD futures edged up 0.6cts to settle at $2.0964 after consolidation trade.

NYMEX September RBOB futures settled 1.0cts lower at $1.9874 gallon, paring a decline to a fresh better-than four-month spot low of $1.9671 gallon.

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