WASHINGTON (DTN) -- Nearby delivery month oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange moved mixed in overnight trade following Wednesday's rally and ahead of a compliance meeting among members of the Organization of the Petroleum Exporting Countries and Russia-led allies scheduled for Thursday afternoon when the producer group is expected to extend the timeline for members who produced above quotas set in a joint supply agreement until November to catch up.
Following a two-day rally, October West Texas Intermediate futures traded flat at $40.15 barrel (bbl) and the Brent contract for November delivery traded above $42 bbl at $42.30 bbl. Both crude benchmarks are on track for better than 5% gains this week. NYMEX October ULSD futures moved 1.45 cents higher to $1.1308 gallon and the front-month RBOB contract traded near $1.1940 gallon for a modest gain following Wednesday's more than 5 cents advance.
Thursday's OPEC+ meeting, known as the Joint Ministerial Monitoring Committee, is unlikely to recommend any changes to their current agreement cutting 7.7 million barrels per day (bpd) of crude production. Saudi Arabia and Russia have not signaled that they are prepared to cut deeper to support the prices. The committee is, however, expected to allow Iraq and other members who produced above their targets in June and July another two months to meet their quota. Wire services report the Iraqi government was mulling the idea of quitting the agreement in January 2021 under pressure from falling oil revenues.
U.S. commercial crude oil stocks fell in the most recent week to a fresh five-month low 496 million bbl during the week ended Sept. 11, according to the data published by the Energy Information Administration. After declining for the seventh time in the last eight weeks, stockpiles are still about 14% above the five-year average level.
Demand for gasoline continued to struggle through the second week of September, edging slightly higher off a summer low 8.390 million bpd at 8.478 million bpd. Demand for distillate fuels plummeted 904,000 bpd to just 2.809 million bpd while stockpiles increased 3.5 million bbl to 179.3 million bbl, about 22% above the five-year average.
The Federal Reserve Open Market Committee on Wednesday upgraded their projection for an economic recovery this year, expecting U.S. gross domestic product to contract at 3.7% compared with the previous forecast of 6.5% and unemployment of 7.6% at the year's end. The previous forecast called for the unemployment rate to remain just below 10% this year at 9.3%. For 2021 and 2022, the central bank expects economic growth to accelerate to 5% and 3.5%, respectively. The central bank's announcement followed the release of the latest data on U.S. industrial production and retail sales, which rose less than expected last month.
Markets also wait for the release of U.S. unemployment figures for the week ended Sept. 12, with consensus calling for jobless claims to fall below 1 million level, at 850,000, in line with trend over the prior two weeks.
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