CRANBURY, N.J. (DTN) -- Nearest delivered oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange moved higher in early trading following the release of monthly data this morning by the Organization of the Petroleum Exporting Countries showing output by the cartel dropped 534,000 barrel per day (bpd) in March to a better than four-year low, and ahead of weekly U.S. oil inventory statistics.
OPEC, citing secondary sources, reported their crude production at 30.022 million bpd in March, the lowest output rate since February 2015, with a 324,000 bpd decline in Saudi Arabian production to 9.794 million bpd leading the drop. OPEC data also showed production in Venezuela plunged 289,000 bpd to 732,000 bpd, a steep drop that has quickly tightened the global oil market alongside OPEC production cuts. Venezuela is not part of the OPEC accord.
West Texas Intermediate and Brent crude were holding below five-month highs reached Tuesday ahead of U.S. supply data for the first week of the second quarter to be released at 10:30 a.m. ET following a mixed report from the American Petroleum Institute published late Tuesday afternoon.
API reported a larger-than-expected 4.1 million barrel (bbl) build in U.S. commercial crude stocks for the week-ended April 5, and greater-than-estimated drawdowns for oil products. The industry group said gasoline inventories tumbled 7.1 million bbl and distillate stocks dropped 2.4 million bbl for the week profiled.
RBOB futures are above psychological resistance at $2 gallon, trading at a $2.0372 six-month high, while the ULSD contract is holding below its $2.0643 200-day moving average with a $2.0620 gallon intraday high.
In early trading. Nymex May WTI futures were up $0.45 near $64.40 bbl, and ICE June Brent also gained $0.45 to about $71.05. Nymex May RBOB futures were 3.5 cents higher at $2.0340 gallon, and May ULSD futures advanced 1.5 cents to near $2.0560 gallon.
Bullish charts and a tightening global oil supply-demand disposition have pushed the market to five-month or better highs, although concern over economic growth is seen restraining the pace of the advance.
On Tuesday, the International Monetary Fund said world economic growth started 2019 at a slower pace than envisioned, prompting IMF to revise down by 0.2% its projection for the global economy to 3.3% for 2019 from January, which compares with an annualized growth rate for 2018 of 3.6%.
IMF did project a pickup in activity in the second half of the year amid a move to more accommodative stances by central banks in the United States, European Union, England and Japan. "Furthermore, the outlook for US-China trade tensions has improved as the prospects of a trade agreement take shape," said Gita Gopinath with IMF in a blog Tuesday.
Wednesday morning, the European Central Bank left unchanged its monetary policy, which keeps the refi rate at 0% and the deposit rate at minus 0.4%, noting again no interest rate hike in 2019 if not longer.
Brian Milne can be reached at Brian.Milne@dtn.com
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