DTN Oil Update
Oil Prices Down 3% on US Crude Build
SECAUCUS, N.J. (DTN) -- Oil prices tumbled by about 3% Wednesday, Nov. 19, morning on the American Petroleum Institute's report of a third straight weekly build in U.S. crude inventories.
Russia's reported plans to reach its OPEC+ production quota over the next few months regardless of U.S. sanctions added to the downside pressure on crude futures.
The NYMEX WTI contract for December delivery fell by $1.64, or 2.7%, to $59.10 bbl after a session low at$ 58.77. ICE Brent for January delivery eased by $1.70, or 2.6%, to $63.81 bbl after sliding to as low as $62.86 earlier.
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December RBOB gasoline futures climbed by $0.0518 to $1.9475 gallon. Front-month ULSD futures, meanwhile, slumped by $0.1121 to $2.589 gallon after soaring to a five-month high of $2.7089 on Tuesday, Nov. 18.
The U.S. Dollar Index was down by 0.151 points to 99.6 against a basket of currencies, adding to the negative sentiment in commodity markets.
U.S. crude oil, gasoline and distillate inventories rose during the week ended Nov. 14, marking a build for the third straight week, the American Petroleum Institute reported on Wednesday, Nov. 18.
U.S. commercial crude oil supply increased by 4.4 million bbl in the profiled week, adding to back-to-back prior weekly builds of 1.3 million and 6.5 million bbl.
The crude build for last week came despite inventories easing by 800,000 bbl at the Cushing, Oklahoma delivery point for NYMEX West Texas Intermediate futures. The Cushing hub saw a 43,000 bbl decline the previous week.
Gasoline inventories rose by 1.5 million bbl, following a 270,000 bbl draw the prior week. Distillate fuel stocks rose by 600,000 bbl, after the previous weekly rise of 944,000 bbl.
Market participants will be focused on the U.S. Energy Information Administration's inventory report due at 10:30 a.m. EST for an official read of the stockpile situation for the week ended Nov. 14.
On the global front, Russian Deputy Prime Minister Alexander Novak told reporters on Wednesday that Russia expects to reach its OPEC+ oil production quota by the end of 2025 or early 2026.
Russia's current quota for November reportedly stands at approximately 9.5 million bpd. Novak indicated that Russia is steadily increasing oil production in November, with the growth rate slightly exceeding that of October. Last month, the country reportedly fell short of its quota by 70,000 bpd.
Novak added that U.S. sanctions imposed in October against Russian energy firms Rosneft and Lukoil had not affected the state's oil production.