Crude Adds to Gains Ahead of EIA Stock Data, Fed Rate Call

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON, D.C. (DTN) -- West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) and Brent crude traded on the Intercontinental Exchange extended gains into Tuesday's afternoon session. They were boosted by market expectations for U.S. commercial oil inventories to be drawn down for a second consecutive week through March 15 as crude inputs at domestic refineries are anticipated to have increased with the end of seasonal maintenance programs.

At 3:30 p.m. CDT, the American Petroleum Institute (API) will release inventory estimates for last week, followed by official data from the U.S. Energy Information Administration at 9:30 a.m. CDT Wednesday.

A consensus of analysts surveyed by the Wall Street Journal call for commercial crude oil inventories in the U.S. to have likely declined by 1.2 million barrels (bbl) during the week ended March 15 following a 1.5 million bbl drawdown reported in the prior week.

Analysts expect gasoline inventories to decline for the seventh straight week through mid-March, seen down 2.1 million bbl, as a busy turnaround season in February joined strong driving demand, with gasoline supplied to the U.S. market above 9 million bpd for a second week through March 8. Market expectations call for a 1.2 million bbl draw in distillate fuel inventory and refinery utilization to have increased by 0.8% to 87.6%.

On the session, NYMEX April WTI futures added $0.75 to settle at an $83.47 bbl 4 1/2-month high on the spot continuous chart ahead of the contract's expiration Wednesday afternoon, with the May contract widening its discount to $0.74 bbl. ICE May Brent futures added $0.49 with settlement at a $87.38 bbl 4 1/2-month high on the spot continuous chart. NYMEX April ULSD futures slipped $0.0275 to $2.7607 gallon, while April RBOB futures added $0.0049 to settle at $2.7622 gallon.

In broader markets, U.S. dollar strengthened for a second session in index trading against a basket of foreign currencies to settle the session at two-week high 103.484 ahead of Wednesday's rate decision by the Federal Open Market Committee (FOMC). FOMC is widely expected to leave the federal funds rate unchanged in the current 5.25% by 5.5% target range, with the market to scrutinize comments to be released with the rate decision for forward guidance on central bank monetary policy.

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

Liubov Georges