Oil Futures Mixed in Tuesday Trade

Oil Futures Mixed in Tuesday Trade

Washington, D.C. (DTN) -- Nearest delivered oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange varied Tuesday morning on mixed signals about the renewal of the Organization of Petroleum Exporting Countries production cuts agreement, while markets await U.S. inventory figures.

In midmorning trade, West Texas Intermediate May contract traded up $0.12 to $63.52 per barrel (bbl), while ICE Brent June futures dipped $0.22 to $70.96 bbl.

The Nymex ULSD May contract was up 0.35 cents to $2.0645 gallon, while RBOB May futures moved down 0.82 cents to $2.0036 gallon.

Mixed oil futures price action comes ahead of the weekly rundown of U.S. supply data with calls for U.S. crude stocks to have risen by 1.9 million barrels per day (bpd) last week, a fourth weekly addition. The American Petroleum Institute, an industry group, issues its supply report at 4:30 p.m. ET for the week ended April 12, ahead of Wednesday's official figures from Energy Information Administration.

EIA data for the first week of April showed U.S. oil production increased to a record 12.2 million bpd, surpassing Russia and Saudi Arabia as a top crude oil producer.

Recent increases in the U.S. oil output were checked by supply shortfalls in Venezuela and Iran amid a tightening grip of U.S. sanctions. On Monday, the U.S. Treasury slapped additional sanctions on Venezuela's oil sector, targeting four more shipping companies operating in the country and nine additional vessels owned or operated by Venezuela state-run oil company PDVSA. United States continues to identify vessels that transport oil from Venezuela to Cuba with Secretary of Treasury Steve Mnuchin in a statement saying any company carrying Venezuelan crude to Cuba is subject to U.S. sanctions.

The latest data from International Energy Agency showed Venezuelan oil production collapsed 270,000 bpd in March to a long-term low of 870,000 bpd due to "blackouts, mismanagement and more recently, by U.S. sanctions," IEA said in its recent monthly report.

Meanwhile, speculations emerged that Russia is ready to pump more oil to offset losses from Venezuela, while casting the doubt on the country's support for extension of OPEC agreement. The latest comments from Russia Finance Minister offer support for this argument when he said the country faces the dilemma of whether to continue restricting output or risk a $40 barrel oil price. Russia was instrumental in reaching an OPEC deal in Vienna, which was largely credited with fueling the oil price rally since the start of the year. Under the OPEC accord, Russia shouldered more than 50% of non-OPEC cuts, while OPEC nations agreed to withhold 800,000 bpd from Jan. 1 for the first six months.

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