The price of oil held above $97 a barrel Wednesday, awaiting data expected to show rising crude inventories and a further cut in U.S. central bank stimulus.
By early afternoon in Europe,
benchmark U.S. crude for March delivery was down 10 cents to $97.31 a barrel in
electronic trading on the New York Mercantile Exchange. On Tuesday, the Nymex
contract surged 1.8 percent, or $1.69, to close at $97.41.
Analysts have forecast U.S. oil
supplies rose last week, suggesting weaker demand. Weekly stockpiles data is
likely to show increases of 2.1 barrels in crude oil stocks and 1.6 million
barrels in gasoline stocks, according to a survey of analysts by Platts, the
energy information arm of McGraw-Hill Cos.
The report from the industry-funded
American Petroleum Institute showed late Tuesday that crude stocks increased by
4.75 million barrels last week.
The report from the Energy
Department's Energy Information Administration - the market benchmark - will be
out later Wednesday.
"Alongside the continuing cold
weather in the U.S., the increase in the (Nymex) price is being explained
partly by the expectation that the newly-opened southern section of the
Keystone XL pipeline will result in crude oil destocking at Cushing," said
analysts at Commerzbank in Frankfurt in a note to clients.
Cushing, Oklahoma, is a major trading
hub for U.S. crude and the delivery point for the Nymex contract.
Investors are also cautious before the
outcome of the Federal Reserve meeting ending Wednesday. Officials are widely expected to cut the central bank's monthly bond buying that has underpinned an
Oil prices have been underpinned by
the Fed's stimulus because it has kept the dollar from strengthening, making
oil more affordable for traders using other currencies. The low interest rates
created by the bond buying have also attracted investors to commodities like
crude oil in search of higher profits.
Brent crude, used to set prices for
international varieties of crude, was up 33 cents at $107.74 on the ICE Futures
exchange in London.
In other energy futures trading in New
- Wholesale gasoline was up 2.13 cents
at $2.6589 a gallon.
- Natural gas added 9.9 cents to
$5.132 per 1,000 cubic feet.
- Heating oil advanced 2.29 cents to $3.0168 a gallon.