MW: Oil futures fall on expectations of rising supplies
Oil futures fell nearly 3% early Wednesday, pressured by expectations that government data will show an increase in U.S.-crude inventories.
Crude oil for May delivery dropped $1.36, or 2.6%, to $52.58 a barrel in electronic trading on Globex.
"This morning, crude prices were lower ahead of the weekly EIA report, which is likely to dictate oil markets' price direction today[,] and after Japanese data showed crude imports in February plunged," said Nimit Khamar, an analyst at Sucden Financial Research.
In Japan, the world's third largest oil consumer, crude-oil-import volumes fell by 13.9% in February from a year earlier, hitting their lowest February total in 20 years, Khamar said.
The Energy Information Administration (EIA) is scheduled to release its weekly petroleum report at 10:30 a.m. Eastern.
Analysts surveyed by Platts expect a rise of 1.4 million barrels in crude-oil inventories. They also expect a decline of 900,000 barrels in gasoline stocks and a 200,000 fall in distillate stocks, which include heating oil and diesel.
Late Tuesday, the American Petroleum Institute reported that crude-oil stocks rose by 4.57 million barrels during the week ended March 20. Motor gasoline stocks fell by 805,000 barrels, and distillate stocks dropped by 1.57 million barrels, API also said.
"We have been cautious about the energy markets for some days now, and expect to see a modest retracement to somewhat lower levels over the short term," said Edward Meir, an analyst at MF Global.
Oil prices may be carving out the outlines of a trading range that they could hold for the rest of the year, Meir said.
"While the bottom end of the range seems to be well defined in the $30-$35 area, the top end could be between $55-$60 given the slow growth, or no growth, mode that seems to be prevalent in most global economies," he said in a research note.
Also on Globex, April-reformulated gasoline fell 3 cents to $1.47 a gallon and April heating oil dropped 4 cents to $1.46 a gallon.
April natural-gas futures fell 8 cents to $4.27 per million British thermal units.
