Futures prices for U.S. crude oil rose Tuesday, ahead of weekly data expected to show a decline in inventories.
Crude for July delivery added 24 cents, or 0.3%, to $98.01 a barrel.
Oil prices on Monday reversed course and fell 8 cents, with losses appearing to be triggered after the Financial Times reported that Federal Reserve Chairman Ben Bernanke plans to say he is close to tapering the central bank’s $85-billion-a-month in asset purchases.
Bernanke is scheduled to hold a press conference Wednesday after the conclusion of the Fed’s two-day policy meeting, which will start later Tuesday. Read more about the Federal Reserve in the Capitol Report blog.
Also, data due out later Tuesday are projected to show U.S. commercial crude-oil stocks declined 1 million barrels for the week ended June 14, according to a Platts survey of analysts. The decline is expected to stem from a reduction in crude-oil imports, which have been volatile recently.
The American Petroleum Institute is slated to issue its weekly report at 4:30 p.m. Eastern time. More closely watched figures from the U.S. Energy Information Administration (EIA) are due Wednesday at 10:30 a.m. Eastern.
A drawdown of 1 million barrels would be “more than double seasonal norms,” with the EIA’s five-year average showing oil stocks typically fall by about 400,000 barrels during this reporting period, according to Platts.
Analysts also expect a weekly rise in gasoline stocks of 1.2 million barrels, and an increase of 300,000 barrels for distillate stocks, which include heating oil and diesel fuel.
Reports on crude-oil inventory released last week were bearish, with both the API and EIA reporting supply increases, even as analysts had expected no change in inventory levels.
J.P. Morgan told clients on Monday to expect tighter oil markets into the fourth quarter of this year as demand increases again.
The “market is underestimating a supply shock, given rising Middle East tensions,” wrote J.P. Morgan commodities analysts.
Syria is currently in focus among energy investors, with the U.S. saying late last week it would increase aid to the opposition in Syria’s civil war. U.S. oil futures on Friday surged 1.2% following the development.
Syria isn’t a key oil producer, but there are concerns that violence there will extend to other parts of the oil-rich Middle East. Russian President Vladimir Putin reportedly told U.S. President Barack Obama on Monday that he doesn’t support the U.S. decision to assist the opposition forces, but that he does support talks aimed at ending Syria’s war.
Putin and Obama were among the leaders attending the Group of Eight summit of industrialized nations in Northern Ireland. The meeting is expected to wrap up Tuesday.
In other moves, Brent crude for August delivery rose 2 cents to $105.49 a barrel, and natural gas for July delivery held steady at $3.88 per million British thermal units.
July gasoline clung to the $2.86-a-gallon level, while July heating oil fell 1 cent, or 0.1%, to $2.94 a gallon.
Source : Marketwatch