DTN Oil Update

Oil Futures Rose, Markets Await OPEC Meeting

HOUSTON (DTN) -- Oil futures rebounded Thursday morning from steep losses the previous day, despite an increase in crude inventories and amid uncertainty about the outcome of OPEC's meeting next week.

The front-month NYMEX WTI futures contract rose by $0.32 to $72.94 per barrel (bbl), and the March ICE Brent futures contract was $76.86 bbl, up by $0.28. February RBOB futures contract edged up by $0.0119 to $2.0476 gallon, while the ULSD futures contract for February delivery rose by $0.0119 to $2.0476 gallon.

The U.S. Dollar Index fell by 0.19% to 107.615 against a basket of foreign currencies.

Market participants are focused on the upcoming OPEC meeting scheduled for Feb. 3, when the oil cartel is expected to confirm its decision to cut gradually oil production. Expectations regarding the outcome of this meeting have gained significance after U.S. President Donald Trump urged Saudi Arabia and OPEC to lower oil prices last week. In December, OPEC postponed its decision to cut gradually 2 million bpd until September 2026.

This morning oil crude futures recovered from losses recorded the previous trading session after the Energy Information Administration and the American Petroleum Institute reported a build in U.S. crude and gasoline inventories for the week ending Jan. 24.

The EIA said that commercial crude oil inventories in the U.S. rose by 3.5 million bbl to 415.1 million bbl in the week ended Jan. 24.

The EIA data on commercial crude oil inventories surpassed the 2.86 million bpd increase reported by the API for the same reference week.

The EIA also noted that gasoline stocks rose by 3.0 million bbl week-over-week to reach 248.9 million bbl, while distillate fuel stocks fell by 5.0 million bbl to 116.2 million bbl last week.

Refinery utilization rates were 83.5%, below the 85.9% reported the prior week, as a result of planned turnarounds at some U.S. Gulf Coast refineries and other output disruptions caused by a winter storm last week.

On earning reports, Valero's renewable diesel segment, which consists of the Diamond Green Diesel joint venture, reported $170 million of operating income for the fourth quarter compared to $84 million recorded in the same period last year.

Shell reported fourth quarter adjusted earnings of $3.66 billion, reflecting lower prices and margins, higher exploration well write-offs, and the non-cash impact of expiring hedging contracts on LNG trading and optimization results.

Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com