Oil Shifts Lower in Morning Trade 05/22 08:15
Oil futures and Brent crude on the Intercontinental Exchange shifted lower
in overnight trade on an unexpected build in U.S. crude inventories, while
ongoing tensions in the Middle East limit the losses.
WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange nearest delivered oil
futures and Brent crude on the Intercontinental Exchange shifted lower in
overnight trade on an unexpected build in U.S. crude inventories, while ongoing
tensions in the Middle East limit the losses.
Near 9 a.m. ET, Nymex June West Texas Intermediate crude futures traded down
85 cents at $62.28 per barrel (bbl) while the ICE July Brent contract fell 51
cents to $71.67 bbl.
Nymex June RBOB futures traded down about a penny to $2.0095 gallon and June
ULSD futures tumbled 2.10 cents to $2.0584 gallon.
The American Petroleum Institute said on Tuesday domestic crude oil
inventories increased by 2.4 million bbl in the week ended May 17, missing
calls for a 2 million bbl draw. API data was mixed for refined products,
detailing a gasoline inventories build of 350,000 bbl for last week versus an
expected 1 million bbl increase, while distillate stockpiles fell 237,000 bbl,
less than expectations for 1 million bbl draw.
Energy Information Administration will release official supply figures at
10:30 a.m. ET.
Oil futures continue to draw support from ongoing tensions in the Middle
East after Iran-aligned Houthi rebels attacked a Saudi military base and
airport in the southern city of Najran. The attack came after Iran announced it
had quadruped its uranium-enrichment production capacity, while Saudi Arabia
called for an emergency summit on the regional security crisis. Saudi Arabia
had previously accused Iran of ordering last week's drone attack on its oil
pipeline and tankers off the coast of United Arab Emirates.
Saudi Arabia said on Wednesday that Organization of the Petroleum Exporting
Countries are committed to keeping the oil market balanced, while reiterating
the producer group is working towards stability on a sustained basis.
WTI, Brent futures traded at three-week highs Monday on reports OPEC would
extend a production agreement, reducing output beyond June. Saudi's energy
minister said the group reached a consensus that production targets should
"roll over for the rest of the year," as global inventories remain above
normal. However, reports emerged that several scenarios are currently being
considered by the group, including reduced production targets for individual
In April OPEC reached a 168% compliance rate with the current agreement,
while holding the cumulative production near a four-year low.
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