Oil Nudges Up Ahead of U.S. Stocks Data
By Sarah McFarlane
Oil prices edged higher on Wednesday, ahead of the latest U.S. inventory data which is expected to show a rise in crude stocks, in line with seasonal trends.
Brent crude, the global oil benchmark, was up 0.2% to $64.76 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.3% at $60.87 a barrel.
Investors awaited the U.S. Energy Information Administration's latest weekly update on oil stocks and production. U.S. crude inventory is expected to rise by 2.5 million barrels in the week ended March 9, according to a survey of analysts and traders by The Wall Street Journal.
Data published by industry group the American Petroleum Institute on Tuesday showed a build in crude oil stocks of 1.2 million barrels last week, while gasoline and distillate inventories fell, consistent with seasonal trends. During the U.S. refinery maintenance season, crude oil stocks tend to build while product stocks fall.
"Generally they start to come back from mid-March, so within the next two or three weeks we should see quite a large rise in refinery utilization," said Tom Pugh, commodities economist at consultancy Capital Economics.
The oil market continued to be caught between rising U.S. output and efforts by the Organization of the Petroleum Exporting Countries and other major producers to cut output.
Some analysts expect OPEC's monthly report, due Wednesday, to show that the cartel's output fell in February, as compliance with the deal to hold back production by 1.8 million barrels a day until the end of 2018 has been strong thus far. Analysts will also be on the lookout for any changes to OPEC's forecasts for U.S. production.
The International Energy Agency and the EIA have both recently revised their U.S. oil production forecasts higher. Output has been helped by the 25% rise in oil prices over the past year, along with improvements in efficiency and technology.
"This U.S. shale engine is not expected to run out of steam anytime soon, " said Stephen Brennock, analyst at brokerage PVM.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.4% to $1.89 a gallon. ICE gasoil changed hands at $573.25 a metric ton, up $4.50 from the previous settlement.
Write to Sarah McFarlane at [email protected]