CRANBURY, N.J. (DTN) -- West Texas Intermediate futures on the New York Mercantile Exchange and Intercontinental Exchange Brent crude settled fractionally higher Tuesday, while NYMEX oil products eased, with the RBOB contract reversing from a $1.8397 4 1/2-month high amid an overbought market.
WTI futures firmed as the U.S. dollar weakened to a three-day low, with the Brent contract giving back most of an advance to a $67.39 three-week high that was bolstered by production cuts from Saudi Arabia and lower exports from Venezuela amid U.S. sanctions and a widespread power outage that has further disrupted outgoing crude from the beleaguered member of the Organization of the Petroleum Exporting Countries. The voluntary and involuntary constraints in exports have worked to ease concern over a globally oversupplied market.
Today's subdued trade included downward revisions to expected 2019 and 2020 global oil supply and consumption rates by the Energy Information Administration in their Short-term Energy Outlook released midday, with the Washington, D.C., analysts pointing to a tight market this year that eases in 2020. EIA expects world oil production to outpace demand by a modest 180,000 barrels per day (bpd) this year, which widens to 430,000 bpd in 2020.
Non-OPEC oil production was revised down 170,000 bpd to 65.62 million bpd for this year, cutting year-on-year growth to 1.07 million bpd. The majority of the downgrade was due to a lower forecast for U.S. oil production, which the EIA projects at 12.3 million bpd, down 110,000 bpd from February's outlook. EIA said U.S. oil production in February averaged 11.9 million bpd, down 100,000 bpd from January.
At settlement, NYMEX April WTI futures were up $0.08 at $56.87 per barrel (bbl) and ICE May Brent $0.09 higher at $66.67 bbl. NYMEX April RBOB futures eased 1.05 cents to $1.8155 gallon at settlement, with the April ULSD contract down 0.85 cent at $1.9857 gallon.
Traders now await weekly supply data from the American Petroleum Institute due out later this afternoon, and from the EIA set for release at 10:30 a.m. EDT Wednesday.
Market expectations call for a commercial crude stocks in the United States to have increased 2.75 million bbl during the week ended March 8. Estimates also expect a 2.75-million-bbl draw in gasoline supply to have taken place during the week profiled, with distillate inventory seen reduced by 1.65 million bbl.
Brian L. Milne can be reached at email@example.com
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