By Barani Krishnan
Investing.com - Oil prices settled barely changed on Tuesday, reversing an early drop, as promise of bullish talk at the upcoming monthly meeting of OPEC+ kept alive the hopes of oil bulls — despite expectations the producers alliance will add to output.
Weekly data on crude and fuel inventories due from industry group API and the U.S. government’s Energy Information Administration was also expected to show higher builds.
Oil markets have brushed aside any negative data on production or stockpiles, focusing instead on the possibility of war in the Ukraine if major producer Russia invades the Eastern European country.
Wednesday’s OPEC+ meeting also set crude markets up for an upward swing as oil bulls counted on the 23-nation alliance to do everything in its power to ensure there will be no slide in prices despite expectations that it will announce the addition of 400,000 barrels per day of output for March.
Oil traders have put aside higher production targets announced by the Saudi-led OPEC+ because of the perception that the alliance cannot pump more due to constraints in the oilfields of many of its members that did not invest in production during most of the two-year long Covid-19 pandemic.
“Crude seems poised to resume its bullish trend as long as the Saudis don't pull a surprise at the OPEC+ meeting and make a push for a larger increase over output,” said Ed Moya, analyst at online trading platform OANDA.
West Texas Intermediate, the benchmark for U.S. crude, settled at $88.20 per barrel, up 5 cents, or 0.1%, on the day. It fell almost $2 earlier in the session.
London-traded Brent, the global benchmark for oil, settled down 10 cents, or 0.1%, at $89.16 per barrel. Brent also lost about $2 earlier in the day.
Tuesday’s market rebound came ahead of weekly data from the U.S. Energy Information Administration that could be mixed at best.
Oil traders will also be on the lookout for weekly inventory data from the American Petroleum Institute at 4:30 p.m. today, ahead of the EIA report, due at 11:00 AM ET (16:00 GMT) on Wednesday.
According to industry analysts tracked by Investing.com, crude inventories likely rose by 1.52 million barrels last week on top of the build of 2.38 million barrels reported by the EIA for the previous week to Jan. 21.
Distillates inventories are expected to have fallen by 1.5 million barrels, adding to the previous week’s decline of 2.8 million.
But gasoline stocks likely jumped by 1.64 million barrels, on top of the previous week’s rise of 1.30 million. Gasoline barrels have ballooned over the past month amid seasonally-weak U.S. demand that contrasted with the rally in oil.