WASHINGTON (DTN) -- Nearby delivery oil futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange pushed higher in early trade Wednesday after industry data showed a much larger-than-expected drop in refined fuels supplies last week although accompanied with a massive build in commercial crude oil inventories, while investors geared up for the latest policy decision from the Federal Reserve on interest rates and their $120 billion a month bond purchasing program.
Near 7:30 a.m. ET, NYMEX June West Texas Intermediate futures advanced $0.51 to trade at $63.43 per barrel (bbl), and ICE June Brent futures gained $0.41 to $66.83 bbl. Next-month delivery July ICE Brent futures expanded its discount to $0.49 against the expiring contact. NYMEX May ULSD futures added 1.09 cents to $1.9166 gallon, with next-month delivery contact holding a marginal 0.17 cents premium. NYMEX May RBOB futures extended 1.13 cents higher to $2.0317 gallon with the June contact trading at a 0.92-cent premium.
The American Petroleum Institute reported on Tuesday commercial crude oil supplies increased 4.319 million bbl during the week-ended April 23 compared with analyst calls for a 100,000 bbl draw while stocks at the Cushing, Oklahoma hub added 742,000 bbl last week. Gasoline stockpiles dropped 1.288 million bbl versus estimates for a build of 200,000 bbl build and distillate inventories declined 2.417 million bbl, well above calls for a 100,000 bbl decline.
U.S. Energy Information Administration will release official inventory data for the reviewed week at 10:30 a.m. ET.
In financial markets, Wall Street positioned for a mixed open in equities as investors await the latest policy decision from the Federal Reserve. Fed Chairman Jerome Powell vowed not to make any rate adjustments until there is "substantial further progress" in moving inflation toward the bank's 2% target, but investors are starting to prepare for its next move -- the tapering of its $120 billion a month in bond purchases. Data released since mid-March shows the economy is kicking into post-pandemic recovery.
U.S. consumer confidence index hit the highest level since February 2020 in April, with gains driven by a more positive assessment of the labor market and current economic conditions. U.S. economy grew at 8.3% annualized rate in the first quarter, according to Atlanta Fed's GDPNow model, however some economists suggest that figure likely exceeds 9%. Bureau of Economic Analysis will release the first reading of the first quarter U.S. GDP 8:30 a.m. ET Thursday.
On Tuesday, Organization of the Petroleum Exporting Countries and nine partners outside of the cartel, including Russia, kept their production quotas unchanged from the April 1 accord, meaning the group will raise output by 350,000 barrel per day (bpd) in both May and June followed by a 450,000 bpd increase in July. The alliance had been holding back around eight million bpd of output, one million bpd of which represented Saudi Arabia's additional voluntary cut. The Saudis also said earlier this month that they planned to ease their voluntary cut over the three-month period.
"The Meeting highlighted the continuing recovery in the global economy, supported by unprecedented levels of monetary and fiscal support, while noting that the recovery is expected to pick up speed in the second half of the year," OPEC+ said in their statement following the meeting on Tuesday.
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