MW: Crude futures rise for third session as dollar falls vs. rivals
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Oil futures rose for a third session on Wednesday, trading just below $83 a barrel, as a smaller-than-expected build in crude inventories and the U.S. dollar's drop against other currencies buoyed sentiment.
Crude oil for May delivery gained 54 cents, or 0.7%, to $82.91 a barrel in electronic trading on Globex.
The contract finished slightly higher on Tuesday.
Crude supplies rose by 421,000 barrels during the week ended March 26, the American Petroleum Institute, a Washington-based industry group, reported late Tuesday. The build was smaller than analysts expected.
Gasoline stocks declined by 946,000 barrels and distillate supplies dropped by 1 million barrels last week, the API also said.
The Energy Information Administration will release its data on inventories at 10:30 a.m. on Wednesday. Analysts polled by Platts expect an increase of 2.65 million barrels in crude inventories. They also project declines of 2 million barrels for gasoline stocks and 1.2 million barrels for distillate supplies.
Last week, the EIA reported that crude inventories rose by 7.3 million barrels, a much bigger increase than analysts had anticipated.
Energy traders are also awaiting a string of U.S. economic reports. At 8:15 a.m., the ADP private-sector employment data for March will be released. It comes ahead of the closely watched nonfarm payrolls survey due on Friday. Later on Wednesday, the Chicago-ISM index for March and factory orders for February will be reported.
Also boosting oil prices on Wednesday was the U.S. dollar's decline against most other major currencies. The dollar index (DXY 81.30, -0.18, -0.22%) , which tracks the performance of the greenback against a basket of currencies, fell 0.3% to 81.240.
Edward Meir, senior commodity analyst at MF Global, said he's cautious about oil prices at current levels.
"For one thing, funds may be reluctant to add to length considering that OPEC itself is getting somewhat nervous and is already hinting that it may increase production at some later point," Meir wrote in a note to clients. Also, oil futures are approaching key technical resistance points, he said.
On Globex, April reformulated-gasoline futures gained 1 cent to $2.21 a gallon and April heating-oil futures added 1 cent to $2.13 a gallon. Both contracts expire at the end of trading on Wednesday.
