DJ: OIL FUTURES: Oil Steady As Market Awaits US Supply Data
Crude oil futures held steady Wednesday in London as the market awaited the release of key U.S. supply data at 1430 GMT.
"All eyes will definitely be on the Energy Information Administration stats and in case of a larger-than-expected crude supply builds the chances of another [price] drop could be heightened considerably," oil brokers at ODL Securities in London said.
At 1122 GMT, the front-month June Brent contract on London's ICE futures exchange was up $0.05 at $49.87 a barrel.
The front-month June contract on the New York Mercantile Exchange was trading $0.01 higher at $48.56 a barrel.
The ICE's gasoil contract for May delivery was up $1.75 at $430.75 a metric ton, while Nymex gasoline for May delivery was down 49 points at 140.95 cents a gallon.
The oil market was largely neutral in anticipation of the U.S. inventory snapshot, giving back some earlier gains when traders covered short positions.
"In the absence of any major macro numbers out of the U.S...the EIA data out later on Wednesday should provide short-term direction for prices," said Edward Meir, an analyst at MF Global in New York.
Analysts surveyed by Dow Jones Newswires forecast crude oil inventories in the week to April 17 rose by a hefty 2.5 million barrels, while gasoline stocks were expected to decline by 300,000 barrels. Distillate inventories were also seen 600,000 barrels lower.
"Expectations of sharply higher oil inventories reflect ongoing concerns about the impact of unusually large refinery shut-ins that are currently taking place due to maintenance and economics shut-ins due to poor refining margins," said Eugen Weinberg, an analyst at Commerzbank in Frankfurt.
Crude inventories will be closely watched, particularly after the American Petroleum Institute industry group released data late Tuesday showing a surprise 1-million-barrel decline in U.S. supplies.
The oil market has been buoyed in recent weeks by optimism in the equity markets, as oil traders shrugged off a backdrop of swelling oil inventories and sluggish demand. But fears over the global economic slowdown and its effect on oil consumption reemerged Monday, when weaker equities and a strong dollar dragged oil prices nearly 10% lower.
Participants won't be able to ignore weak fundamentals for much longer, said Stephen Schork, editor of the Schork Report, an energy market newsletter.
"Bullish sentiment in the S&P index should cushion any big shocks in the next couple of DOE [U.S. oil inventory] reports, but we can't expect this honeymoon to hold through May," he said.
Separately, Asia's top three oil importers - Japan, China and South Korea - each posted steep drops in crude imports in March, a month when oil prices were on average nearly 50% lower on-year.
