MW: Crude futures edge higher ahead of supply data
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) -- Crude-oil futures managed minor gains early Thursday as traders staked out positions ahead of the latest weekly data on U.S. petroleum supplies.
The energy market also digested an updated International Energy Agency forecast in which it again revised lower 2008 and 2009 estimates for oil demand.
Crude for December delivery rose 27 cents to $56.45 a barrel in electronic trading on Globex, recovering after the contract hit an intraday low of $54.67 a barrel.
"OPEC officials have indicated that the cartel could decide by the end of the month to cut production again in an attempt to raise prices," said analysts at Action Economics.
"However, concerns over the global growth slowdown have weighed more heavily, keeping a lid on oil prices," they said.
In its monthly report Thursday, the IEA said it expects global demand to grow by 120,000 barrels to 86.2 million barrels a day in 2008, down 330,000 barrels from its previous daily forecast. And for 2009, it now sees demand rising 350,000 barrels to 86.5 million barrels a day, which is down 670,000 barrels a day from its previous estimate.
On Wednesday, crude futures fell $3.17, or 5.3%, to close at $56.16 a barrel on the New York Mercantile Exchange.
Odein Ajumogobia, Nigeria's oil minister, told Reuters on Wednesday that the Organization of Petroleum Exporting Countries needs to assess whether there is need for an output cut because the 1.5 million-barrel reduction that was announced in October and began on Nov. 1 has had no effect on the market. Nigeria is a member of OPEC.
In a separate Reuters report, OPEC President Chakib Khelil said the cartel may cut oil supplies again by the end of this month. OPEC's next scheduled meeting isn't until Dec. 17 in Algeria, but it could take action ahead of that -- as early as Nov. 29 -- if prices fall further from current levels, Khelil told Reuters.
Supply data ahead
The Energy Information Administration will release its weekly data on U.S. petroleum supplies at 11 a.m. Eastern, a day late because of the Veterans Day holiday.
Analysts at MF Global expect the figures covering the week ended Nov. 7 will show a buildup of 1.4 million barrels in crude inventories. They also expect to see increases of 400,000 barrels for distillate supplies and 1 million barrels for motor gasoline.
On average, industry analysts polled by Platts expect to see increases of 1.1 million barrels for crude, 1 million barrels for distillates and 850,000 barrels for motor gasoline.
Also on the Globex, December reformulated gasoline traded flat at $1.25 a gallon and December heating oil eased 1 cent to $1.83 a gallon.
December natural-gas futures fell 4 cents to $6.37 per million British thermal units.
The EIA also will delay its release of the weekly natural-gas supply data by a day, to Friday at 10:30 a.m. Eastern. Analysts at IHS Global Insight expect gas in storage to have risen by 40 billion cubic feet for the week ended Nov. 7.
