WASHINGTON, D.C. (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange dropped in early trading Wednesday morning in response to larger-than-expected builds in U.S. commercial crude oil and products inventories detailed in industry data, while a rally in global equities limited losses.
Ahead of 9 a.m. ET, NYMEX July West Texas Intermediate futures were down $0.75 near $52.75 per barrel (bbl), with ICE August Brent $0.40 lower near $61.60 bbl. NYMEX July RBOB futures pared a loss to a $1.6905 fresh three-month low on the spot continuous chart to trade at $1.7035 gallon, down about 2.05 cents. NYMEX July ULSD futures were 2.5 cents lower at $1.7965 gallon.
WTI moved lower in overnight trade after American Petroleum Institute reported on Tuesday across-the-board builds in domestic crude oil and petroleum products supplies. Industry data showed an unexpected 3.55 million bbl build in U.S. crude oil inventories for last week, missing analysts' calls for a 1.3 million bbl draw. In refined products, API said gasoline stockpiles increased 2.7 million bbl, much higher than an expected 200,000 bbl gain, while distillate inventories jumped 6.31 million bbl, surpassing expectations for 100,000 bbl increase.
Energy Information Administration will release official figures on U.S. supplies for the week ended May 31 at 10:30 a.m. ET.
Ahead of the API report, oil futures were lifted on Tuesday by a rally in the U.S. stock market, which notched the best trading session of 2019 after Federal Reserve officials signaled another rate cut this year. Fed Chairman Jerome Powell said on Tuesday the central bank could lower interest rates if the economy slows in response to escalating tariffs and global trade uncertainties. The comments follow earlier remarks from Federal Reserve Bank of St. Louis President James Bullard that a lowering of rates "may be warranted soon."
U.S. stock indexes surged Tuesday with the Dow Jones Industrial Average jumping 500 points, boosting oil futures and other risk assets in market-on-close trading. In premarket trade, U.S. stock indexes futures point to a higher open for equities, with DJIA set to open with a 160 points gain.
Liubov Georges can be reached at email@example.com
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.