Oil Futures Advance Ahead of API Data

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Settling near intra-session highs, crude and product futures on New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange ended Tuesday higher, drawing support from expectations U.S. crude oil inventories declined during the week of Nov. 22. Renewed hopes for a U.S.-China trade deal before a Dec. 15 deadline fueled investors' appetite for risk-on-trade.

Tuesday afternoon, the U.S. stock market continued its winning streak, with all major indexes once again reaching new record highs after government data showed new home sales in November rose at their fastest pace since 2007.

The bullish data was partly offset by a lackluster reading on this month's consumer confidence from the Conference Board, detailing a modest decrease in the confidence index after four consecutive months of declines.

Consumer Confidence Index plunged nearly 10 points in the beginning of September at the height of U.S.-China trade tensions and since than struggled to regain momentum. Oil complex pared earlier gains in response to the bearish reading, but shook off the weakness amid broader market optimism over progress in U.S.-China trade talks.

China's Commerce Ministry said Tuesday both sides had "reached a consensus on properly resolving issues related to phase 1 trade agreement," following a phone call between China's top trade negotiator, Liu He, and his U.S. counterparts, Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steve Mnuchin.

Over the weekend, Beijing announced new stringent regulations for protection of patents, copyrights and other intellectual property -- a major sticking point in the trade disagreement between the two countries. Markets view the move as a major concession to U.S. President Donald Trump, potentially setting the stage for a breakthrough towards reaching an elusive agreement in the 16-month trade war.

Tuesday afternoon, the market's focus included weekly supply data from the American Petroleum Institute set for release at 4:30 p.m. EST, followed by official figures from U.S. Energy Information Administration at 10:30 a.m. EST Wednesday.

Investors overwhelmingly expect U.S. crude oil stockpiles to have declined 600,000 barrels (bbl) during the week of Nov. 22, while gasoline supply is expected to have risen 1.6 million bbl and distillate stockpiles to have built by 1.2 million bbl. Typically, crude oil inventories decline in mid-November, as refineries ramp-up throughputs upon completion of fall maintenance programs.

At settlement, NYMEX January West Texas Intermediate futures climbed $0.40 to $58.41 bbl, and the ICE January Brent contract moved up $0.62 at $64.27 bbl. NYMEX December ULSD futures advanced 1.63 cents to $1.9606 gallon and NYMEX December RBOB futures surged 2.99 cents to a $1.7047 gallon settlement.

ICE Brent January futures contract and NYMEX December RBOB and ULSD futures will expire end of day Friday (11/29).

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

(CZ)

Liubov Georges