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Oil regains strength as focus shifts to U.S. stockpile data

Published 01/04/2017, 09:17 AM
© Reuters.  Oil higher as focus shifts to U.S. stockpile data
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Investing.com - Oil prices were higher on Wednesday, rebounding from sharp overnight losses as market players looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (21:30GMT) later on Wednesday. Official data from the Energy Information Administration will be released Thursday, amid forecasts for an oil-stock drop of 1.7 million barrels.

This week's reports come out one day later than usual due to Monday's New Year holiday.

Crude oil for February delivery on the New York Mercantile Exchange tacked on 24 cents, or around 0.45%, to $52.56 a barrel by 9:15AM ET (14:15GMT).

U.S. crude prices tumbled $1.39, or 2.6%, a day earlier, turning lower after touching an 18-month high of $55.24.

Elsewhere, Brent oil for March delivery on the ICE Futures Exchange in London advanced 23 cents, or 0.4%, to $55.70 a barrel.

London-traded Brent prices rallied to $58.37 on Tuesday, a level not seen since July 2015, before reversing gains to end down $1.35, or 2.4%.

Traders continued to monitor developments surrounding the landmark deal reached by the Organization of the Petroleum Exporting Countries and several non-OPEC oil producers to reduce their output this year.

January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day.

The deal, if carried out as planned, should reduce global supply by about 2%.

However, some traders remain skeptical that the planned cuts will be as substantial as the market currently expects.

There are also some worries in the market about production increases in Libya and Nigeria, which are both allowed to ramp up production as part of the OPEC deal.

Elsewhere on Nymex, gasoline futures for February added 0.2 cents, or 0.1% to $1.630 a gallon, while February heating oil slipped 0.3 cents, or 0.22%, to $1.672 a gallon.

Natural gas futures for February delivery dropped 2.2 cents, or 0.65%, to $3.305 per million British thermal units, extending Tuesday's plunge of almost 11%, as forecasts of mild weather replaced predictions of severe cold.

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