By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Crude-oil futures extended gains in electronic trading Wednesday, but remained below $80 a barrel ahead of a weekly U.S. supply report, which is expected to show a decline in inventories.
Crude oil for August delivery CLQ2 -0.28% added 16 cents, or 0.2%, to $79.52 a barrel on the New York Mercantile Exchange during Asian trading.
Investors awaited official U.S. crude oil inventory data from the Energy Information Administration report due later in the day.
Analysts polled by Platts expect a decline for crude stockpiles by 1 million barrels; a rise of 300,000 for gasoline inventories, and an increase by 1 million barrels for distillates, for the week ended June 22.
Late on Tuesday, the American Petroleum Institute had reported crude-oil supplies rose by 507,000 barrels in the same week. The API also said gasoline supplies rose 373,000, while distillate stockpiles declined 1 million barrels.
Traders were also looking to Europe ahead of a two-day leaders summit kicking off Thursday, designed to address the region’s financial crisis.
Crude prices were pressured on Tuesday after German Chancellor Angela Merkel’s comments seemed to put the chance of any progress at the coming EU summit closer to nil.
Egan-Jones Ratings lowered Germany’s sovereign rating from AA- to A+ and issued a negative watch on the rating on expectations the country will be left with significant uncollectable receivables due to its exposure to the euro zone.
The ratings agency said that Chancellor Angela Merkel is fighting a losing battle in resisting calls for EU bonds and pushing for fiscal controls until euro-area countries agree to broad oversight of their budgets.
Virginia Harrison is a MarketWatch reporter based in Sydney.
