Morning Market Overview
New York Mercantile Exchange oil futures nearest to delivery and the front month Brent contract on the Intercontinental Exchange moved higher early Wednesday following lower settlements Tuesday ahead of weekly statistics from the Energy Information Administration, and increasing signs global oil supply will tighten later this year as a second round of U.S. sanctions target Iranian oil exports.
Domestically, weekly supply data released late Tuesday by the American Petroleum Institute was modestly bearish for crude and price supportive for oil products. API reported a small 38,000 bbl build in commercial inventory for the week-ended Aug. 24 compared with market expectations for a drawdown between 500,000 and 700,000 bbl.
API said Cushing stocks increased 130,000 bbl, with the tank farm in Cushing, Oklahoma the delivery location for NYMEX West Texas Intermediate futures. API reported a lower-than-expected 21,000 bbl increase in gasoline inventory, with the market calling for a build between about 200,000 and 400,000 bbl.
The gain in distillate stocks was also less-than-estimated, with API reporting a 982,000 bbl build compared with market estimates for an increase between 1.4 and 1.5 million bbl. The EIA will release its weekly statistics at 10:30 AM ET.