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Crude oil futures edge higher ahead of U.S. supply data, Fed meeting

Published 03/20/2013, 05:12 AM
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Investing.com - Crude oil futures edged higher during European morning hours on Wednesday, as traders looked ahead to closely-watched weekly supply data on U.S. stockpiles of crude and refined products from the U.S. Energy Information Administration later in the day.

Investors were looking ahead to the outcome of the Federal Reserve’s policy meeting, as well as developments surrounding a bailout deal for Cyprus.

On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD92.78 a barrel during European morning trade, up 0.3% on the day.

New York-traded oil prices held in a range between USD92.36 a barrel, the daily low and a session high of USD92.95 a barrel.

Oil traders looked ahead to data from the U.S. government on oil and fuel supplies later in the day to gauge the strength of demand from the world’s largest oil consumer.

The report was expected to show that U.S. crude oil stockpiles increased by 2 million barrels last week, while gasoline inventories were forecast to fall by 2.1 million barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories unexpectedly fell by 0.4 million barrels last week, while gasoline stocks rose by 0.3 million barrels.

Market players also looked ahead to the outcome of the Federal Reserve’s two-day policy meeting later in the day, as investors try to assess the central bank's attitude towards monetary stimulus.

Fed Chairman Ben Bernanke is to give a press conference after the release of the policy statement.

The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.

Meanwhile, concerns over a highly criticized bailout plan for Cyprus continued to weigh on appetite for riskier assets.

Cyprus’s President Nicos Anastasiades called an emergency meeting with political leaders to look at alternatives after parliament rejected the terms of the bailout agreement in a vote Tuesday.

Following the vote, the European Central Bank said it will provide liquidity to Cypriot banks within existing rules.

German Finance Minister Wolfgang Schaeuble warned Cyprus that its banks might never be able to reopen if it rejected the bailout.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery added 0.3% to trade at USD107.77 a barrel, with the spread between the Brent and crude contracts standing at USD14.99 a barrel.

London-traded Brent prices fell to a three-month low of USD107.28 a barrel on Tuesday, while the spread between the contracts fell to the lowest level since July.

Brent prices have been under pressure in recent sessions due to an improving production outlook in the North Sea.

At the same time, U.S. oil stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures, are declining as new pipelines relieve a supply glut there.

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