Oil Down for Third Consecutive Day
U.S. crude oil futures slipped , unable to hold early gains and finishing a third straight session lower as oil markets wait for fresh oil inventory data due Wednesday and a possible OPEC output cut when oil ministers meet Thursday.
"The weather is mild and we failed to get any traction above $62 earlier, so we tested under $61. It's wait for the data tomorrow and OPEC's meeting." said a NYMEX floor broker.
"If you look at the trading pattern over the past few days, they buy in the morning and sell in the afternoon. I not surprised to see market coming off," Nauman Barakat, senior vice president at Macquarie Futures USA, said.
Organization of Petroleum Exporting Countries member nations have sent mixed signals about another production cut ahead of the group's meeting Thursday in Abuja, Nigeria.
OPEC's Gulf members, including Saudi Arabia, UAE, Kuwait and Qatar, favor leaving OPEC's output target unchanged and seeking full compliance with the group's existing deal, a delegate told Reuters on Tuesday.
OPEC agreed at an October emergency meeting to cut production 1.2 million barrels per day from Nov. 1.
Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah said on Tuesday he did not think there was a majority in OPEC supporting an output cut.
Both Nigerian Minister of State for Petroleum Edmund Daukoru and Qatari Oil Minister Abdullah al-Attiyah declined to openly call for another output cut. Daukoru had previously come out in favor of an additional cut.
OPEC will cut if it considers the global supply/demand situation warrants a reduction, Libya's top oil official said on Tuesday. On Monday, Hasan Qabazard, OPEC's director of research, said a majority of OPEC members were in favor of another cut.
OPEC has yet to show signs in December of lowering output from November, when OPEC did not cut as much as targeted, consultant Petrologistics said Tuesday.
OPEC's November output target was 26.3 million bpd. Compliance estimates have varied. A Dec. 6 Reuters survey found supply fell to 26.91 million bpd, down 730,000 from October.
A fresh oil inventory report from the U.S. Energy Information Administration is due Wednesday morning at 10:30 a.m. ET. The average of analysts views in an expanded Reuters poll on Tuesday called crude oil supplies to have dropped 600,000 barrels last week.
Distillate stocks were seen down 100,000 barrels, with analysts views mixed. Gasoline supply was expected to be up 1.2 million barrels as refiners increased capacity use another 0.5%.
After last week's cold snap, milder U.S. temperatures this week have helped keep prices penned. Heating demand will average below to much below normal for the next five days in the key heating oil consuming U.S. Northeast, according to private forecaster DTN Meteorlogix.
NYMEX January crude resistance was charted at $62 and tested Tuesday. Above that is the Dec. 8 high of $63.65. Support at $60.95 gave way and support at $60.50 approached.
Heating oil's resistance was at $1.75, with support at $1.70. The crack spread was at $11.36.
RBOB resistance was pegged at $1.67, with support at $1.57, and then $1.599, the Nov. 28 low. Gasoline resistance was charted at $1.6350, with support at $1.5850. The crack spread
was at $6.35.