DTN Oil Update
Oil Futures Hit Multi-Month Hikes, USD Up
HOUSTON (DTN) -- The February WTI futures contract on the New York Mercantile Exchange and the Brent futures contract on the Intercontinental Exchange Brent settled higher on Thursday, reaching three-month-high levels, driven by tight supply expectations due to low crude inventories.
NYMEX WTI futures contract futures delivery rose by $0.94 to $74.26 bbl while the February ICE Brent futures contract climbed by $1.05 to $77.21 bbl, the highest level since October. The front-month RBOB futures contract edged up by $0.0271 to $2.0377 gallon while the ULSD futures contract for February shipments rose by $0.0179 to $2.3859 gallon.
The U.S. Dollar Index continued rising by 0.69% to 109.220 against a basket of foreign currencies.
Oil futures continued moving up one day after Energy Information Administration (EIA) data showed that U.S. stocks of crude dropped again last week, driven in part by a higher refinery utilization.
However, in the same reference week, oil products inventory rose due to sluggish demand caused by higher prices, and despite severe weather conditions across the U.S.
Commercial crude oil inventories in the U.S. dropped by 1 million bbl to 414.6 million bbl in the week ended Jan. 3. The figure was lower-than-expected compared to 4.022 million bbl crude oil draw reported by the American Petroleum Institute for the same reference week on Monday, Jan. 7.
API data also showed crude oil stocks at the Cushing, Oklahoma tank farm, the delivery point for NYMEX WTI futures, fell 3.115 million bbl last week.
Downstream, gasoline inventories rose 6.3 million bbl week-over-week to reach 237.7 million bbl, while distillate fuel stocks rose 6.1 million bbl to 128.9 million bbl last week, the EIA said.
Refinery utilization rates were 93.3% in the week ended Jan. 3, compared to 92.7% recorded the prior week.
On Friday, market participants will focus on the U.S. Employment Situation report for December. During November non-farm payroll rose by 227,000, according to the Bureau of Labor Statistics released on Dec. 6.
However, the market anticipates a lower number in December, ranging from 125,000 to 200,000. Meanwhile, the unemployment rate is expected to remain steady at 4.2%, which is still high compared to the jobless rate of 3.7% recorded year-over-year.
On industry news, Chevron and Shell Thursday announced the start of oil production from the Whale semi-submersible platform in the deepwater Gulf of Mexico. Estimated peak output is 100,000 gross barrels of oil equivalent per day with up to 15 wells in the first phase of development.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
