Crude Oil Futures Up for 9th Session

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange nearest delivery oil futures and Intercontinental Exchange Brent futures edged higher Thursday afternoon, led by equity market gains, brushing off a largely bearish weekly supply report issued midweek by the Energy Information Agency.

After briefly retreating in the morning trade, Nymex West Texas Intermediate and ICE Brent settled higher for a ninth straight session. The WTI February contract settled $0.23 higher to $52.59 barrels (bbl), while ICE March Brent settled up $0.24 to $61.68 bbl. Nymex February ULSD futures gained 2.53 cents to $1.9061-gallon settlement, while February RBOB futures added 0.53 cents to settle at $1.4307 gallon.

Equity markets ended higher Thursday afternoon, following the comments by Federal Reserve Chairman Jerome Powell at an event at the Economic Club of Washington earlier today. Powell sought to emphasize his earlier remarks that the Fed is not on a "preset" course in hiking interest rates. Chairman Powell said that the Central Bank is willing to change its policy, if required, while simultaneously addressing investors' concerns over economy. "I don't see anything that suggests the possibility of recession in the near term" said Chairman Powell.

In December, the Federal Reserve hiked the federal funds rate 25 basis points to 2.5%. The accompanying news release by Fed Chairman Jerome Powell at the time suggested central bank officials were ignoring tumbling equity and commodity markets, and would raise interest rates this year regardless of domestic and international markets.

Oil futures also remained supported by Saudi Arabia's commitment to lower crude exports by 800,000 barrels per day (bpd) from the November export rate of 7.9 million bpd to 7.1 million bpd in February. The steep drop, and comments from the Saudis suggesting they would do what it takes to balance the world oil market, eased concern over a global oil supply surplus.

The bullish developments for both the supply and demand outlook outweighed bearish weekly supply data released Wednesday by the EIA detailing another week of steep builds in gasoline and distillate fuels and a modest draw in crude. Demand for distillate fuels during the week-ended Jan. 4 fell to a three-year low.

Liubov Georges can be reached at liubov.georges@dtn.com

(BAS)