Oil Halts Decline, With Supply In Focus

Oil futures ticked modestly higher in electronic trade early Wednesday, halting a slide of more than 2% for U.S. benchmark crude, with energy supply in focus.

Crude futures for December delivery  rose 22 cents to $93.26 a barrel after a 2.2% fall the previous day on the New York Mercantile Exchange.

December Brent crude   improved by 51 cents to $106.36 a barrel, erasing some of its 0.6% loss on Tuesday.

The earlier losses were partly blamed on a report from the Organization of the Petroleum Exporting Countries (OPEC), tipping higher-than-expected production for the current year.

With monthly reports due out from the U.S. Department of Energy later Wednesday and from the International Energy Agency on Thursday, Citi Futures analysts said they were still assessing the global supply picture.

“But we continue to see the first half of 2014 as a clear surplus unless OPEC trims output more than we anticipate at their Dec. 4 summit in Vienna,” they wrote late Tuesday.

Also on the calendar were weekly supply data from the American Petroleum Institute, slated for 4:30 p.m. Eastern Time.

A Platts survey of oil analysts projected a 1.8-million-barrel rise in U.S. crude inventories for the week ended Nov. 8. Gasoline supplies, however, were predicted to fall by 1.2 million barrels, while distillate stocks — which include heating oil — were also seen down 1.2 million barrels, Platts said.

While expectations for further gains to crude supplies helped weigh on oil Tuesday, Platts also cited Oil Outlooks president Carl Larry as saying the consensus could well be wrong.

“It’s looking like we’re going to start refilling a lot of those refineries that have been more in hibernation than they have been in turnaround,” Larry said, forecasting a 1.75-million-barrel decline for weekly inventories.

In other energy-futures trade Wednesday, December gasoline  ticked a penny higher, for a 0.2% gain to $2.59 a gallon, while December heating oil  was also up one penny at $2.86 a gallon after dropping 1.3% on Tuesday.

December natural gas  extended its gains by almost 3 cents, or 0.7%, to $3.64 per million British thermal units after a forecast for colder-than-normal for the Eastern U.S. sent the contract 1.2% higher the previous day.

Source : Marketwatch