DTN Oil Update
Oil Futures Rebounded, Tracking a Drop on Crude Stocks
HOUSTON (DTN) -- The New York Mercantile Exchange WTI and Intercontinental Exchange Brent futures contracts for February delivery rebounded Thursday, tracking low crude inventory levels reported, despite a stronger U.S. dollar.
Commercial crude oil inventories in the U.S. fell by 1 million bbl to 414.6 million bbl in the week ended Jan. 3. But the figure was lower-than-expected as the American Petroleum Institute reported a 4.022 million bbl crude oil draw 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, slid 3.115 million bbl last week.
While limited crude supplies set a bullish tone in the markets, EIA data showing an oversupply of gasoline and diesel is raising concerns about sluggish buying interest in fuels, especially with heating oil demand is expected to increase due to the severe cold weather affecting the U.S. this winter.
Gasoline stocks 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.
Increasing gasoline and diesel inventories are driven also by higher refining capacity. Refinery utilization rates were at 93.3% in the week ended Jan. 3, which was higher than the 92.7% recorded the previous week, according to EIA data.
However, low crude inventories are expected to persist due to tighter sanctions against Russian, Iranian and Venezuelan crudes from the incoming President-elect Donald Trump's administration and the European Union.
U.S. crude inventories are about 6% below the five-year average for this time of the year, the EIA reported yesterday.
The front-month NYMEX WTI futures contract rose by $0.40 to $73.72 bbl and the February ICE Brent futures contract increased by $0.41 to $76.57 bbl. The front-month RBOB futures contract edged up by $0.0042 to $2.0144 gallon while the ULSD futures contract for February shipments rose by $0.0179 to $2.3686 gallon.
The U.S. Dollar Index climbed by 0.53% to 109.205 against a basket of foreign currencies.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
