DTN Oil Update
Oil Steady in Volatile Trade Amid US Inventory, Iran Watch
VIENNA (DTN) -- Oil and product futures were little changed in volatile trading Wednesday morning as energy markets continued to adjust to January's outsized rally on geopolitics and inclement weather.
Crude futures retained their volatile February pattern by moving a few cents between negative and positive territory as traders followed the military escalation between U.S. and Iranian forces, and a large weekly drawdown in U.S. crude stockpiles reported by the American Petroleum Institute (API).
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U.S. crude oil inventories plunged by 11.1 million barrels (bbl) during the week ended Jan. 30, after production shut-ins driven by Winter Storm Fern, API data showed on Tuesday. It was the second straight weekly draw in crude stocks after the prior week's decline of 247,000 bbl.
The API also said distillate fuel oil stocks fell by 4.8 million bbl during the reporting week, compared to a 2 million bbl build the prior week. Gasoline inventories surged by 4.7 million bbl week-over-week, compared to a 415,000-bbl drop last week.
The U.S. Energy Information Administration will report at 10:30 a.m. official inventory numbers for the week ended Jan. 30.
Inventories aside, market attention was largely focused on U.S.-Iranian interactions in the Persian Gulf amid the White House's efforts to de-nuclearize the Islamic republic.
The U.S. shot down an Iranian drone approaching a U.S. carrier in the Arabian Sea late Tuesday. Separately, a group of Iranian gunboats briefly intercepted a U.S.-flagged tanker near its territorial waters, raising escalation concerns. The White House in response reaffirmed its commitment to seek a diplomatic solution, and Iranian government officials said that preparations for talks this week were ongoing.
NYMEX WTI crude futures for March delivery rose $0.05, or 0.08%, to $63.25 bbl, after the prior session's rebound of more than 1%. ICE Brent crude for April delivery climbed $0.23 to $67.56 bbl.
Downstream, ULSD futures for March edged up $0.0081 to $2.4174 gallon, and RBOB for March delivery advanced $0.0149 to $1.9128 gallon.
The U.S. Dollar Index remained little changed, strengthening by 0.084 points to 97.385 against a basket of foreign currencies.