DTN Oil Update
Oil Futures Fall Amid Ample Supplies and Weak Demand
HOUSTON (DTN) -- Oil futures fell Friday morning amid ample supplies and mixed demand fundamentals, due to higher-than-expected crude inventory build and a fall in distillate fuel stocks last week.
The front-month NYMEX WTI futures dropped by $0.98 to $72.77 bbl while the April ICE Brent futures contract fell by $0.92 to $75.56 bbl. March RBOB futures contract fell by $0.0228 to $2.0637 gallon while ULSD futures contract for March delivery declined by $0.0454 to $2.4580 gallon.
The U.S. Dollar Index reversed losses from the previous trading session by increasing 0.27% to 106.54 against a basket of foreign currencies.
A stronger dollar Friday morning was supported by recent comments from U.S. President Donald Trump suggesting that trade deal with China might be possible. The Trump administration imposed a 10% tariff on imported goods from China early February.
In contrast, oil futures were under downward pressure on expectations of ample supplies due to an increase on crude inventory levels as reported by the Energy Information Administration for the week ended Feb. 14.
The EIA reported on Thursday, Feb. 20, commercial crude oil inventories in the U.S. rose by 4.6 million bbl to 432.5 million bbl last week. The EIA data were higher than the 3.3 million bbl build reported by American Petroleum Institute Wednesday, Feb. 19, for the same reference week.
Gasoline stocks fell by 200,000 bbl week-over-week to reach 247.9 million bbl, below the 2.83 million bbl fall reported by API for the week ending Feb. 14, EIA data showed.
Distillate fuel stocks recorded the steepest decline by dropping 2.1 million bbl to 116.6 million bbl last week. Distillate fuel inventory fell by 2.69 million bbl in the same week, API data showed.
A build in U.S. crude inventory is anticipated to offset concerns of supply tightness in case OPEC decides to extend voluntary oil output cuts of 2.2 million bpd, after April.
The 2.2 million bpd adjustments are expected to be gradually phased out on a monthly basis until the end of September 2026. This monthly increase can be paused or reversed subject to market conditions, as OPEC+ agreed during its December meeting.
