DTN Oil

WASHINGTON (DTN) -- West Texas Intermediate futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange registered little change in afternoon trading Tuesday as market sentiment turned cautious ahead of the release of inventory data in the United States as investors positioned ahead of this weekend's meeting among Saudi-led Organization of the Petroleum Exporting Countries and 13 allied producers.

A consensus of analysts and traders surveyed by the Wall Street Journal revealed U.S. commercial crude oil inventories likely increased modestly last week as refiners are seen gradually raising run rates following fall maintenance.

U.S. crude oil inventories likely increased by 100,000 bbl during the week ended Nov. 17 after stockpiles spiked by 17.5 million bbl in the prior two weeks. At 439.4 million bbl, commercial crude oil supplies currently stand 2% below the five-year average.

A small crude build is largely seen on the back of higher refinery run rates that are estimated to have increased 0.8% from the previous week to 86.9% of capacity.

Domestic oil supplies have grown at a rapid pace in recent weeks, suggesting market fundamentals have been less bullish than previously thought. Oil traders typically look at the inventory level in the United States as a proxy for market balances globally.

Gasoline inventories are seen to have fallen 600,000 bbl as of Nov. 17, while stocks of distillates, which are mostly diesel fuel, are also seen dropping by 600,000 bbl.

The American Petroleum Institute will release its weekly inventory survey at 4:30 PM ET, followed by the official government report from the U.S. Energy Information Administration Wednesday morning.

Aside from the U.S. inventory reports, market participants will also monitor any hints for a potential policy move from OPEC+ ministers that next meet in Vienna on Sunday (11/26). The base-case scenario is the block's largest producers, Saudi Arabia, and Russia, would at least extend voluntary output and export cuts of 1.3 million bpd into the first quarter of 2024. Interestingly, Russia reduced its oil exports by 580,000 bpd in the most recent week to a three-month low 2.7 million bpd compared to a pledged reduction of 300,000 bpd. The move is likely driven by considerations of higher export volumes seen over the month of October.

Saudi Arabia has already committed to extend the voluntary output reduction of 1 million bpd through the end of the year. Saudi oil production is currently hovering around 9 million bpd -- the lowest in nearly a decade outside of the 2020-2021 pandemic years.

In the currency market, the U.S. dollar erased early losses to settle the session at 103.449 following the release of minutes from the Federal Open Market Committee's Nov. 1 meeting showing all members of the committee agree interest rates should remain high for "some time" until inflation is clearly moving towards its 2% target. The officials expressed no appetite for any rate cuts in coming meetings, particularly as inflation remains well above its goal, according to the released document.

At settlement, January WTI futures slipped $0.06 to $77.77 bbl, with the February contract trading at a $0.15 bbl premium to the new front-month contract. ICE January Brent futures added $0.13 to $82.45 bbl.

NYMEX December ULSD futures advanced $0.0754 to $2.9249 gallon, with the December RBOB contract posting a $0.0078 gain to settle at $2.2338 gallon.

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