Crude Gains, But Downside Pressures Persist

Crude oil advanced on Tuesday after falling to as low as $91.40 the previous day. Yet prices are steady around the $92.00 a dollar level as downside pressures persist amid speculation US fuel stockpiles increased for a third week.

According to the Energy Information Administration (EIA) data tomorrow gasoline supplies are expected to have gained 2.2 million barrels while distillates probably rose by 1.38 million, signaling slowing demand in the US.

Recent weak economic data from the United States, that included the weakest monthly job growth in three years in December, has also dampened the outlook for fuel demand in the world’s biggest oil consumer.

Meanwhile, crude inventories probably shrank by 1.15 million in the week to January 10 according to the EIA data. The industry-funded American Petroleum Institute will be releasing a separate supply data later today.

The weaker-than-expected jobs numbers from the US suggested that the Federal Reserve may slow down tapering its bond-buying stimulus, which could increase the dollar’s supply in the market pushing it lower, adding some upside pressures on oil prices.

Also pushing prices lower is the fresh deal struck between Iran and six major powers to curb Tehran’s nuclear program, as the deal may reduce sanctions on Iran that will lead to increasing oil supplies in the global markets. The deal will come into force on January 20.

Meanwhile, Libyan supplies are picking up as output at the El Sharara field got back to 300,000 barrels per day, the country’s oil minister said. Yet, after months of domestic protests, the country’s output is still below the 1.2 million bpd it was producing in July.

- WTI crude oil futures for February is trading around $ 92.01 a barrel after rising $0.21

- Brent futures for February settlement is trading around $ 106.95 a barrel after rising $0.20

- Natural gas is trading at $ 4.321 per cubic feet after rising 1.10%

- Gasoline is trading at $ 2.6365 per cubic feet after rising 0.09%

- Heating oil (diesel) is trading at $ 2.9395 a gallon after rising 0.21%