WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange were mostly higher in early trade Wednesday after markets shrugged off sizable weekly builds in U.S. crude and gasoline inventories and turned attention back to the upcoming meetings among producers Thursday and Friday when markets expect a coordinated deal on global supply cuts to be reached.
In early trading, May West Texas Intermediate futures clawed back $0.78 to $24.41 per barrel (bbl) and ICE Brent June futures edged up $0.20 to $32.07 bbl. Both benchmarks continue to trade within their recent ranges. NYMEX May RBOB slipped 0.34 cents to $0.6448 gallon and the NYMEX May ULSD contract moved 0.36 cents higher to trade $1.0312 gallon.
After a two-day sell-off, WTI futures bounced higher ahead of Energy Information Administration's inventory report even as traders overwhelmingly expect another week of large U.S. inventory builds. American Petroleum Institute, an industry group, reported Tuesday nationwide crude oil stocks spiked over 10 million bbl for the second week in a row, surging 11.938 million bbl last week alone. U.S. gasoline stocks jumped 9.445 million bbl on the week, more than three times expectations, as the coronavirus pandemic hammers motor gasoline demand. Distillate fuel stocks declined 177,000 bbl versus an estimated build of 2 million bbl. Industry data also reported crude stocks at the Cushing, Oklahoma-hub surged 6.804 million bbl on the week.
Traders now watch for official inventory data from U.S. Energy Information Administration out 10:30 a.m. ET. Oil prices were buoyed by U.S. Energy Secretary Dan Brouillette's announcement that the United States would participate in Friday's virtual G20 energy ministers meeting aimed at "restoring calm to the global energy markets." The United States won't, however, send a representative to Thursday's expanded OPEC+ meeting, but officials indicated domestic operators would cut output by at least 2 million bpd this year as "lower crude prices force companies to cut back operations," the U.S. Energy Department said Tuesday.
OPEC+ invited 10 additional oil producing countries to attend Thursday's virtual meeting, including the U.S., United Kingdom, Canada, Norway, Argentina, Brazil, Trinidad and Tobago, Columbia, Egypt, and Indonesia. All but U.S., UK, and Canada have confirmed they will attend.
EIA projected global oil demand would fall sharply this year as a result of coronavirus pandemic, down to 95.52 million bpd from 101.85 million bpd in its previous forecast.
"If realized, 2020 would see the largest year-over-year percentage decline in global oil consumption since at least 1990, the year EIA began tracking global consumption levels," said EIA. "The private sector and the free market are driving those cuts."
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