MW: Crude futures rally ahead of U.S. petroleum data
NEW YORK (MarketWatch) -- Crude-oil futures rose more than 4% early Wednesday, rebounding from their decline in the previous session as traders readied themselves for data on U.S. petroleum stockpiles that are expected to show an increase in crude supplies.
Crude for January delivery rose $1.88, or 4.4%, to $43.94 a barrel in electronic trading on Globex. Earlier, the contract hit an intraday high of $44.72 a barrel.
On Tuesday, crude prices dropped $1.64 to end at $42.07 a barrel on the New York Mercantile Exchange.
"Crude prices bounced back this morning after Asian markets rallied on hopes of more stimulus packages by governments and as market participants appear to cut short positions," said Nimit Khamar, analyst at Sucden Research, in a note.
Khamar cited the impending U.S. petroleum inventories report for last week as well as the Organization of Petroleum Exporting Countries' decision next week on production quotas as catalysts for traders' moves on their short positions.
In Asia, markets shot higher Wednesday, as expectations of interest-rate cuts and economic-stimulus measures forced bearish investors to the sidelines. See Asia Markets.
Many market observers expect OPEC to deliver a substantial cut in production at its Dec. 17 meeting. In October, the oil cartel announced a production cut of 1.5 million barrels a day but kept production unchanged at its November meeting.
Also on Globex, January reformulated gasoline rose 4 cents, or 4%, to 98 cents a gallon and January heating oil gained 4 cents, or 3%, to $1.48 a gallon.
Natural gas for January delivery also rose, up 5 cents to $5.63 per million British thermal units.
Inventory data ahead
At 10:35 a.m. Eastern time, the Energy Information Administration and the American Petroleum Institute will separately release their reports on estimated U.S. petroleum supplies for the week ended Dec. 5.
Analysts polled by Platts expect a buildup of 2.7 million barrels in commercial crude-oil stocks for the week. They also project a rise of 1.4 million barrels in gasoline stocks and a decline of 1.6 million barrels in distillate stocks.
The Platts analysts also project a small increase in refinery utilization, up to 84.6% from 84.3%.
Last week, the EIA reported that U.S. commercial crude inventories dropped by 400,000 barrels to stand at 320.4 million barrels.
The EIA will report Thursday the latest data on natural-gas inventories. Global Insight is projecting a storage withdrawal of 112 billion cubic feet for the week ended Dec. 5.
