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Oil stuck in familiar range as investors await U.S. supply data

Published 02/01/2017, 04:12 AM
© Reuters.  Oil prices steady in familiar range ahead of U.S. supply data
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Investing.com - Oil prices were little changed during European morning hours on Wednesday, holding in a familiar trading range as market players awaited fresh weekly information on U.S. stockpiles of crude and refined products.

Crude oil for March delivery on the New York Mercantile Exchange inched up 6 cents, or around 0.1%, to $52.86 a barrel by 4:10AM ET (09:10GMT), after gaining 18 cents, or about 0.3%, a day earlier.

Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London added 3 cents, or less than 0.1%, to $55.60 a barrel. Futures rose 26 cents, or nearly 0.5%, on Tuesday.

The U.S. Energy Information Administration will release its weekly report on oil supplies at 10:30AM ET (15:30GMT) Wednesday, amid analyst expectations for a rise of 3.3 million barrels.

Gasoline inventories are expected to rise by 982,000 barrels while stocks of distillates, which include heating oil and diesel, are forecast to fall by 903,000 barrels.

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 5.8 million barrels in the week ended January 27.

The API report also showed a gain of 2.9 million barrels in gasoline stocks, while distillate stocks rose 2.3 million barrels.

Futures have been trading in a narrow range around the low-to-mid $50s over the past month as sentiment in oil markets has been torn between expectations of a rebound in U.S. shale production and hopes that oversupply may be curbed by output cuts announced by major global producers.

U.S. drilling activity has risen by more than 6% since mid-2016, taking it back to levels seen in late 2014, when strong U.S. crude output contributed to a collapse in oil prices.

The revival in U.S. drilling has raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.

OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade as global producers look to reduce oversupply and support prices.

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 to 32.5 million for the next six months.

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

Elsewhere on Nymex, gasoline futures for March tacked on 0.5 cents, or 0.4%, to $1.559 a gallon, while March heating oil was little changed at $1.631 a gallon.

Natural gas futures for March delivery jumped 7.8 cents, or 2.5%, to $3.195 per million British thermal units.

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