NYMEX crude edges higher in Asia ahead of API supply data

Investing.com - Crude oil prices gained in early Asia on Tuesday ahead of industry data on U.S. crude and refined product stockpiles expected to set a tone.

The American Petroleum Institute will release data from last week's estimated levels for crude, gasolines and distilaltes, to be followed on Wednesday by more closely watched figures from the Department of Energy.

On the New York Mercantile Exchange, WTI crude for May delivery edged up 0.06% to $51.94 a barrel.

Overnight, crude Oil futures rose on a choppy day of trading, as record supply levels and geopolitical risks in Yemen remained in focus.

The mix of supply and politics has created price volatility with the concerns of a looming slowdown in production, which some analysts predict will lead to a further downturn in prices.

Crude oil prices have declined by more than 50% since peaking above $100 a barrel last July.

Consequently, speculative traders have entered the market at a low price in hopes of turning a profit. Since the end of January, strike options for WTI crude at $60, $70, $80 and $90 have increased steadily, Reuters reported. During the same span, options for WTI crude at a strike price of $100 a barrel are up by approximately 20%.

On international markets, future and option trading levels have also spiked. Last week, speculators in Brent crude futures and options raised net long positions to the highest level since July, 2014, according to data from the Intercontinental Exchange obtained by Fox Business.

On Monday, Brent crude for June delivery gained 0.28% or 0.17 to $59.12 a barrel. The spread between the international and U.S. domestic benchmarks for crude stood at $7.64 a barrel.

Poor trade data, however, in China weighed on energy prices. Last month, China imported 6.3 million barrels per day, down 5.2% from a month earlier. Iran, which is primed to increase crude exports as economic and financial sanctions from Western powers ease, counts on China as one of its top energy partners.

Meanwhile, steady fighting in Yemen between Iranian-backed, Shiite-led Houthi rebels and Sunni-led troops from Saudi Arabia continued to boost crude prices. While Saudi Arabia foreign minister Prince Saud Al Faisal told reporters on Sunday that his country is not at war with Iran in Yemen, he insisted that Iran withdraw its political and military support of the Houthis. This came as the U.S. has expanded its role in the conflict by inspecting military targets in the area and searching nearby vessels for Iranian arms headed for Yemen.

Yemen is strategically located on the Bab el-Mandeb strait, one of the world's largest chokepoints for oil. A closure of the narrow entrance could limit outflows into the Gulf of Aden. Energy traders are sensitive to risky geopolitical news involving Saudi Arabia.