WASHINGTON (DTN) -- In pre-inventory trade Wednesday, oil futures nearest delivery on the New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange advanced, gaining on reports the Organization of the Petroleum Exporting Countries and Russia-led allies are considering extending or deepening an ongoing agreement to reduce production by 7.7 million barrels per day (bpd) to offset expected demand destruction over the winter inflicted by a "second wave" of coronavirus infections across the European Union and United States, while an unexpected and large drawdown in U.S. commercial crude oil inventories reported by the American Petroleum Institute added to the bullishness.
Domestic crude oil supplies decreased 8.01 million barrels (bbl) during the final week of October, according to the API, contrary to calls for a 575,000 bbl increase. Gasoline stockpiles added 2.45 million bbl and distillate inventories dropped 577,000 bbl from the previous week. Traders await official stats from the U.S. Energy Information due out 10:30 a.m. ET.
In early trading, NYMEX December West Texas Intermediate futures traded more than $1 higher to near $38.67 bbl and the January Brent contract on ICE rallied $1.08 to $40.81 bbl. NYMEX December ULSD futures gained 2.41 cents or more than 2% to $1.1511 gallon and the December RBOB contract advanced 1.69 cents to $1.0938 gallon.
The vote count in Tuesday's U.S. presidential election continues in several states, with the race tighter than many polls and analysts projected. Incumbent Donald J. Trump and former Vice President Joe Biden are locked in a tight race across battleground states, and vote tallying could conceivably continue into next week, prompting President Trump to threaten a legal challenge to stop the count.
With many investors on edge over the election, stocks on Wall Street traded mixed and the U.S. dollar index moved higher against a basket of foreign currencies.
The Federal Open Market Committee today begins a two-day monetary policy meeting, with investors expected to pay close attention to additional stimulus action the central bank might consider. The federal funds rate is expected to remain unchanged at 0%.
This morning, private payroll provider ADP will release its jobs report for October, and the Department of Labor will publish its nonfarm payroll report Friday morning, which is expected to show 600,000 new jobs were added in October, down from job growth of 661,000 in September.
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