On Wednesday oil prices staged a moderate recovery, as market players anticipated key U.S. inventory data.
Data from an
industry group late Tuesday showed that U.S. inventories fell last week,
though the official data due Wednesday is expected to show another
considerable buildup, says The Wall Street Journal.
April-dated Brent crude rose 0.3% to $56.55
a barrel on London’s ICE Futures exchange.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded up 1% at $48.77 a barrel.
Both contracts lost more than 3% in the previous session, pressured by a rally in the U.S. dollar. Oil is priced in dollars and it becomes less attractive for holders of foreign currency as the greenback appreciates.
The American Petroleum Institute, an industry group, said that its data showed U.S. crude stockpiles fell by 404,000 barrels in the week ended March 6, in contrast with expectations and a trend of rising supplies.
On Tuesday, the EIA cut its forecast for Nymex crude prices to an average of $52.15 a barrel this year, down from its prior forecast of $55.02 a barrel, also raising its forecast for U.S. oil output for 2015 while slightly lowering its forecast for 2016.
Nymex reformulated gasoline blendstock for April—the benchmark gasoline contract—fell 0.5% to $1.8108 a gallon, while ICE gas oil for March changed hands at $560.25 a metric ton, down a dollar from Tuesday’s settlement.
The official inventory survey from the U.S. Energy Information Administration is due Wednesday and some analysts expect stockpiles to have risen by 4.8 million barrels last week. Oil stocks are already at their highest level in about 80 years, the EIA said in its last report.
“For the past several weeks, inventories have increased far beyond estimates and [we] believe this week would likely be the same,” Phillip Futures analyst Daniel Ang said. Unresolved refinery strikes in the U.S. are pulling down refining and causing an abundance of crude, he said.
“We have little hope for dropping inventories. Production shows no sign of weakness as U.S. continues to produce at high rates,” Mr. Ang said.
