Oil price edges down ahead of US inventory reports

Crude oil futures have edged down so far in today’s trading session, with Brent extending its sharp decline from the past two sessions. Crude prices gave away their earlier gains following the release of an upbeat annual consumer inflation report from China, with investors now eyeing the release of weekly US inventory reports, as well as monthly market data from across the globe, for further cues.

Brent for April delivery had shed 57 cents, or 0.97 percent, to $57.96 per barrel as of 09:01 GMT on the London-based ICE Futures Europe exchange. The benchmark had found some support during early Asian trading after a report from the Chinese National Bureau of Statistics showed that consumer prices rose 1.4 percent in February year-on-year, outpacing forecasts. A slide in producer prices, however, underlined the deepening economic weakness in one of the world’s largest energy consumers.

Reuters quoted Ric Spooner, chief market analyst at Sydney’s CMC Markets, as saying that the uptick in the consumer price index “is mildly positive” for oil prices. Spooner claimed that the improved reading meant that demand from China was “a little bit better than expected”. The main crude benchmarks had diverged overnight, with Brent dropping 2.34 percent while US West Texas Intermediate (WTI) crude climbed 54 cents.

April WTI futures had shed 37 cents, or 0.74 percent, to $49.63 a barrel in electronic trading on the NYMEX in New York as of 07:43 GMT. Markets will now shift their focus to reports from the American Petroleum Institute (API) trade body later today and tomorrow’s weekly inventory report from the Energy Information Administration (EIA).
Investors will also be eyeing the release of monthly market data from across the globe for further cues on market fundamentals. The EIA’s monthly report is due out later today, while the Paris-based International Energy Agency (IEA) is scheduled to release its report on Friday. The monthly oil market report from the Organization of the Petroleum Exporting Countries will be published next Monday.
Based on the two front month contracts, Brent was trading at a premium of $8.33 to WTI as of 09:01 GMT. The premium reached its highest point in over a year last week at $13 per barrel.