WASHINGTON (DTN) -- Nearest delivery oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange traded on either side of unchanged early Wednesday, with investors looking to inventory data released later this morning for an update on U.S. petroleum stockpiles after an industry report showed a surprise 2 million barrel (bbl) increase in commercial crude supplies.
The American Petroleum Institute late Tuesday reported domestic crude supplies unexpectedly rose during the week ended July 3, contrary to expectations of 3.4 million barrels drawdown. API data also showed gasoline stockpiles fell by larger-than-expected 1.8 million barrels, while distillate inventories declined by about 847,000 barrels on week. Crude stocks at the Cushing, Oklahoma storage hub, meanwhile, edged up by 2.2 million barrels. Traders now wait for official supply data from U.S. Energy Information Administration released 10:30 a.m. ET.
In its latest Short-Term Outlook released Tuesday, the agency revised higher its estimates for global demand growth in both 2020 and 2021, forecasting demand of 99.8 million barrels per day by the fourth quarter of next year. The agency, however, warned the bullish outlook is subject to many uncertainties tied to constant evolvement of "mitigation and re-opening efforts' to COVID-19 pandemic.
In the United States, there seems to be a growing disparity between the GOP Governors of Texas, Greg Abbott (R), and Florida, Ron DeSantis(R), on how to mitigate further spread of the virus. Gov. DeSantis pushed for further reopening of the hard-hit state on Tuesday and advocated the reopening of schools in the fall, while Gov. Abbott appeared to have adopted a more conservative approach to disease mitigation, mandating a statewide rule on wearing masks.
U.S. coronavirus infections topped 3 million mark late Tuesday, according to John Hopkins University.
Atlanta Federal Reserve President Ralph Bostic warned Tuesday that the economic recovery might now take longer than previously thought. "There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise," Bostic said in the interview.
U.S. equity futures suggest further declines Wednesday, with a 90-point opening bell retreat priced in for Dow Jones Industrial and contracts linked to the S&P 500 are indicating a flat opening for the broader benchmark.
The U.S. Dollar Index, which tracks the greenback against a basket of six global currencies and typically moves in the opposite direction of stocks in premarket trading, little-changed from last night's levels at 96.880.
In early trading, NYMEX August West Texas Intermediate futures were unchanged from last night's closing levels at $40.62 bbl and Brent crude traded just above $43 bbl. NYMEX RBOB August futures slipped lower to $1.2666 gallon and NYMEX ULSD August futures traded near flat at $1.2366 gallon.
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