Oil Futures Dip Amid Global and U.S. Supply  Discrepancies

SECAUCUS, NJ (DTN) – Oil futures reversed their early rise on Thursday (11/20) as market participants weighed the impact of global oversupplies against U.S. inventories showing crude stockpiles declined last week while refined products stocks increased. 

The NYMEX WTI contract for December delivery settled down $0.30 at $59.14 bbl.  ICE Brent for January delivery closed down $0.13 at $63.38 bbl.

The retreat came after both benchmarks rebounded in the morning from a 2% steep fall recorded the prior trading session on expectations of ample global supplies. On Wednesday (11/19) Russia announced plans to fully meet its OPEC+ production quota despite the threat of fresh U.S. sanctions and recent Ukraine drone attacks on its energy infrastructure.

Prior to this announcement, crude markets had been depressed by bearish forecasts from the International Energy Agency and OPEC.

Oil’s fundamentals reached a crossroads as global crude supplies contrasted with latest inventories reported by the U.S. Energy Information Administration. U.S. commercial crude stocks declined by 3.4 million bbl to 424.2 million bbl during the week ended November 14, following a prior build of 6.4 million bbl, the EIA said.

Refined products futures prices deepened Thursday’s early losses, with December RBOB gasoline settling down $0.0137 at $1.9184 gallon. Front-month ULSD futures slid $0.1024 to close at $2.5333 gallon.

The drop in crude and refined products futures prices came despite the U.S. Dollar Index’s drop of 0.066 points to 100.085 that should technically have provided a boost to commodity markets.

The weaker settlements for gasoline and distillates also followed weekly stockpiles builds in fuels reported by the EIA.

Distillate oil inventories rose by 200,000 bbl to 111.1 million bbl during the week to November 14, after a prior weekly decline of 600,000 bbl. Total motor gasoline inventories increased by 2.3 million bbl to 207.4 million bbl, after a previous 900,000-bbl drop.