Oil Futures Shallowly Mixed Wednesday
WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange nearest delivered oil futures and Brent crude on the Intercontinental Exchange were trading shallowly mixed in early trading following losses Tuesday after another larger-than-expected build in U.S. crude oil inventories was reported by American Petroleum Institute, while renewed tensions in U.S.--China trade talks spurred concern over global demand.
Near 8:50 a.m. ET, June Nymex West Texas Intermediate traded up 29 cents at $61.69 per barrel (bbl) while July ICE Brent futures dipped 3 cents to $69.85 bbl.
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Nymex June RBOB futures traded 0.58 cents lower at $1.9426 gallon and June ULSD futures added 0.42 cents to $2.0418 gallon.
The API said late Tuesday U.S. crude inventories increased 2.806 million bbl last week, far above calls for a modest build of 250,000 bbl. API data also showed gasoline inventories dropped 2.833 million bbl, nearly double an expected 1.5 million bbl draw while distillate inventories declined 834,000 bbl versus calls for a draw of 1 million bbl.
Energy Information Administration will release official supply figures at 10:30 a.m. ET.
Oil futures have also been pressured by surging U.S. crude production, which is expected to increase by 150,000 barrels per day (bpd) this year to 12.45 million bpd, according to EIA. In its Short-Term Energy Outlook released on Tuesday, EIA estimates U.S. output will average 13.38 million bpd in 2020, surpassing Russia and Saudi Arabia, as the world's largest oil producer.
In U.S.-China news, fears about an escalation in the trade war between the world's two largest economies sent oil futures to one-month lows on Tuesday after Trump administration threatened to hike tariffs on all Chinese imports into the United States. Heightened rhetoric comes just days before the two sides are scheduled to meet for a new round of trade talks in Washington, D.C.
U.S. Trade Representative Robert Lighthizer reiterated on Tuesday that the White House was planning to increase tariffs on $325 billion of Chinese goods from 10% to 25%, starting Friday. The two sides are moving forward with trade talks, with Chinese government confirming that its top negotiator, Liu He, will attend talks in Washington on Thursday.
Liubov Georges can be reached at liubov.georges@dtn.com
(BAS)
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