Crude Steady Above $92.50 As Stockpiles Fall

Crude oil is seen steady above the $92.50 a barrel on Wednesday. This came amid expectations of steady growth in global oil consumption after a surprise fall in U.S. crude stockpiles, while risk appetite continues on hopes of steady global recovery.

The American Petroleum Institute (API) showed yesterday that crude inventories in the world`s largest oil consumer fell 1.4 million barrels last week, compared with an expected rise of 2.3 million barrels, proving an upside support to oil prices.

Meanwhile, the stock markets continue to be strong, with the Dow Jones hitting another record high on Tuesday for the seventh straight session amid assurances by the Feds of continuing the easy policy and the positive U.S. data.

“Downside risks for oil seem to be very limited. If you look at equities and other markets, there is no reason to sell crude. I think oil prices have bottomed out and, overall, we will see a recovery”, said Tetsu Emori, from Astmax Investments, Tokyo.

- Crude oil is trading as of this writing around the $92.75 a barrel level compared with the opening at $92.52, while the highest is at $92.79 and the lowest is at $92.52

Also pushing prices higher is the persistent worries of supply disruption from the Middle East and the rise expected in the U.S. retail sales later today, which may confirm a steady recovery for the world`s largest economy.

Gains may be limited as the eurozone’s economic outlook is uncertain. Germany`s central bank expressed concerns about the region’s crisis while the eurozone’s industrial production may contract in February.

Adding to the downside pressures on price is OPEC, boosting its crude production to the highest in three months in February, led by increased output from Saudi Arabia and Iraq

- Brent is trading as of this writing around the $109.43 a barrel after falling 0.20% as resuming operations at the North Sea pipeline is adding to the downside pressures

Markets will also be closely watching today the weekly inventories data from the U.S. Energy Information Administration (EIA) due later today for further insight into demand. Inventories are expected to rise by 2.3 million barrels.

- Natural gas is trading as of this writing at $3.665 per 3.643 cubic feet after falling 0.05%

- Heating oil is trading at $2.9541 a gallon after rising 0.19%

- Gasoline is trading as of this writing at $3.168 a gallon, after rising 0.56%