Oil Futures Lower as Traders Await API Data

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Nearest delivery oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange shifted lower in midmorning trade Tuesday, with the front-month West Texas Intermediate contract retreating from a 5-month high as investors look to this week's rundown of inventory data on U.S. petroleum stocks and the policy meeting among Organization of the Petroleum Exporting Countries and allies.

Near 9:30 a.m. EDT, the U.S. dollar index is testing lows not seen since June 2018, falling back 0.77% to 92.568, while limiting downside for the oil complex. The U.S. crude benchmark pulled back 42 cents to $42.48 barrel (bbl) and the spot month international Brent crude contract traded near $45 bbl. NYMEX ULSD September futures moved 1.04 cents higher to $1.2500 gallon and front-month RBOB futures declined 0.47 cents to $1.2655 gallon.

Oil futures traded mixed on Tuesday after reports emerged that OPEC+ members reached a historically high compliance rate in July with ongoing cuts of 9.7 million barrels per day (bpd) supply agreement. The OPEC+ Joint Ministerial Monitoring Committee, which makes recommendations on output, is set to meet Wednesday, but is largely expected to make no changes to the deal after producers in August scaled back output cuts from 9.7 million bpd to 7.7 million bpd, albeit with some producers who had failed to abide by earlier restrictions agreeing to maintain deeper cuts.

Trades will also be looking toward data on U.S. crude and product supplies. The American Petroleum Institute is expected to release its weekly data on crude inventories after the closing bell Tuesday, while the Energy Information Administration's more closely followed weekly data is due out Wednesday morning. Analysts mostly expect crude oil stocks to decrease by about 1.3 million bbl, while gasoline stocks are expected to fall by 1.6 million bbl and distillate inventories are expected to decrease by 1 million barrels on the week.

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

Liubov Georges