MW: Oil climbs on expectations for weekly drop in inventories
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- Crude prices on Wednesday climbed above $73 a barrel ahead of weekly inventory data expected to show the secondly consecutive decline in U.S. stock piles.
On the New York Mercantile Exchange, crude-oil futures for July delivery were up $1.20 at $73.19 a barrel.
On Tuesday, the American Petroleum Institute estimated crude stocks fell by 4.5 million barrels last week, with the industry group's projection boosting expectations "that energy demand is now responding to the U.S. economic recovery," said analysts at Action Economics.
Crude on Tuesday gained 55 cents to finish at $71.99 a barrel as traders continued to debate whether the European debt crisis and robust supplies would eventually start weighing on sentiment. Global developments have pushed the price of oil down from an 18-month high of $87 a barrel during the past month.
The more bullish case comes on thinking the hurricane season, combined with a drilling moratorium in the Gulf of Mexico, could push prices up in coming months.
One market strategist, T.J. Marta of Marta on the Markets LLC, noted the potential impact of the BP Pc (BP 34.36, -0.32, -0.92%) oil spill still spewing in the Gulf of Mexico.
"Norway has halted all new drilling due to unanswered concerns about the cause for the BP leak. While Britain has ruled out a deepwater moratorium 'for the moment,' Norway's move will add to pressure on the UK for greater caution, and the combined global caution could very well add upward pressure to oil prices going forward," wrote Marta in an early note.
