DTN Oil Update
Oil Prices Slip Amid Weak Macro Data, US Crude Build
VIENNA (DTN) -- Oil prices edged lower for a third consecutive trading day Wednesday morning ahead of weekly official U.S. oil inventory data. The American Petroleum Institute reported late Tuesday that commercial U.S. crude oil inventories expanded by 6.5 million barrels (bbl) last week.
The NYMEX WTI contract for December delivery fell $0.42 to $60.14 bbl, and ICE Brent for January delivery slid $0.36 to $64.08 bbl.
December RBOB gasoline futures retreated $0.0144 to $1.9084 gallon, while front-month ULSD futures received support from shrinking fuel inventories, advancing $0.0134 to $2.4580 gallon.
The U.S. Dollar Index edged higher by 0.020 points to 100.090 against a basket of foreign currencies.
Weak macroeconomic data from the U.S. and China fanned demand growth concerns over the past few days just as a rally in the U.S. Dollar Index added to the pressure on oil prices. Federal Reserve Chairman Jerome Powell last week suggested the central bank could skip a much-anticipated 25-basis point cut in December. On Tuesday, the U.S. Dollar Index settled above 100 points for the first time since May, pressuring commodities priced in that currency.
At the same time, the prospect of fewer-than-expected rate cuts added to a gloomy oil demand growth outlook just as lackluster macroeconomic indicators pointed to a prolonged weakness in U.S. and Chinese manufacturing.
On Sunday, the Caixin manufacturing PMI showed factory activity in China slowing for the seventh consecutive month in October. On Monday, the Institute for Supply Management reported the U.S. manufacturing PMI slipping to 48.7 in October, the eight consecutive monthly sub-50 reading.
API's weekly inventory report also showed shrinking U.S. fuel inventories, lending some support to prices, particularly to ULSD futures. The Energy Information Administration's weekly inventory report is scheduled for 10:30 a.m. EST release Wednesday.
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