WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange pulled back Tuesday, as market participants wrapped up the last trading day of the year. NYMEX January RBOB and ULSD contracts expired lower, continuing a retreat from recent 3-1/2 month highs on the spot continuous chart during the holiday-shortened trade week.
Tuesday afternoon traders still at their desks await a fresh set of supply data on last week's change in U.S. crude and petroleum stocks. Markets mostly expect crude oil inventories to have fallen 3.1 million barrels (bbl) during the week ended Dec. 27, while gasoline stocks are estimated to have risen 3.7 million bbl and distillate supply to have built by 3.2 million bbl. American Petroleum Institute will release its weekly data at 4:30 p.m. EST, while official statistics from U.S. Energy Information Administration are delayed until 11 a.m. EST Friday (1/3) due to the New Year's Day holiday.
At settlement, February West Texas Intermediate contract dropped back $0.62 to a $61.06 bbl settlement, and ICE March Brent ended at $66 bbl, gapping down following Monday's expiration of the February contract that traded at a $68.99 3-1/2 month high on the spot continuous chart before rolling off the board. NYMEX January ULSD futures expired at $2.0283 gallon, down 1.23 cents before rolling off the board, and next-month delivery February ULSD futures settled at a 55-point discount to the expired contract. NYMEX January RBOB futures expired down 3.05 cents at $1.6978 gallon, with the February contract moving to a 73-point discount to the expired contract.
The oil complex posted sharp losses in closing out the year after sharp advances through the second half of December, and U.S. equities moved sharply lower Tuesday despite Washington and Beijing preparing to sign an initial trade agreement that has generated an optimistic economic growth outlook for 2020.
WTI futures also fell despite a softer dollar, which plunged to a fresh six-month low 96.020 in index trading after U.S. Consumer Confidence Index unexpectedly dropped in December following a slight increase last month. The Index now stands at 126.5, down 0.3 points from November's reading of 126.8.
Trading was also impacted by lower activity due to the holiday season.
Lower settlements came despite news Tuesday U.S. President Donald Trump will sign a phase one trade deal with Chinese negotiators on Jan. 15, 2020, at a White House ceremony. According to wire services, Chinese President Xi Jinping will not attend the ceremony, but will instead be represented by high level officials from Beijing. The president added that he plans to travel to Beijing "at a later date" to begin discussions on a second trade deal with China that addresses broader structural topics not included in phase one. Earlier reports indicated the Chinese delegation will be led by China's Vice Premier Liu He.
Elsewhere, traders are closely monitoring escalating tensions in Iraq after protestors broke into U.S. Embassy compound in Baghdad, with Trump blaming Iran for orchestrating the siege. Over the weekend, the United States carried out an airstrike against the Kataib Hezbollah militia group, while protesters in Iraq briefly forced the closure of its southern Nassiriya oilfield.
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