Oil price gains as markets eye US inventory report

The price of crude oil futures has edged up so far in today’s trading following a sharp decline during the previous session. Market participants will be eyeing the release of weekly US inventory data later today.

Brent for March delivery had gained 21 cents, or 0.37 percent, to $56.64 per barrel as of 07:09 GMT on the London-based ICE Futures Europe exchange. Yesterday, the benchmark suffered downward pressure following downbeat global market outlook reports by the International Energy Agency and OPEC.
The Wall Street Journal cited a note from Citi Futures analyst Tim Evans as saying that the reports show that the first half of the year will see a substantial global supply-demand surplus, with stronger demand and tighter non-OPEC supply emerging only in the second half of the year. AFP quoted CMC market analyst Nicholas Teo as observing in a market commentary how “both WTI and Brent sold off between three and five percent” during the previous trading session.

March WTI futures had risen 0.80 percent, or 40 cents, to $50.42 in electronic trading on the NYMEX in New York as of 07:09 GMT today. Market participants will be eyeing the weekly inventory report from the US Energy Information Administration (EIA), due at 15:30 GMT. Yesterday, the American Petroleum Institute (API) reported that commercial crude stockpiles in the US rose by 1.6 million barrels in the week to 6 February.

A Bloomberg News poll has it that crude inventories expanded by 3.5 million barrels in the seven days to 06 February. Stockpiles in the prior period were at 413.1 million, the highest level in weekly records from the Energy Department’s statistical arm dating back to August 1982.
Based on the two front month contracts, Brent was trading at a premium of $6.22 to WTI as of 07:09 GMT. The ratio had narrowed 19 cents from yesterday’s $6.41 close.