WSJ:OIL FUTURES: Crude Rangebound in Asia, U.S. Oil Stocks Likely Lower
By Eric Yep
Crude-oil futures rose slightly in Asian trade Wednesday but the upside was limited by concerns of falling oil demand as investors remained on the sidelines due to uncertainty about U.S. tax and budget policies.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at $88.85 a barrel at 0517 GMT, up $0.35 in the Globex electronic session. January Brent crude on London's ICE Futures exchange rose $0.17 to $110.01 a barrel.
Oil prices are supported by falling U.S. oil inventories. Late Tuesday, the American Petroleum Institute, an industry group, said U.S. crude stockpiles fell by 2.217 million barrels last week.
Analysts surveyed by Dow Jones Newswires expect crude-oil inventories fell 300,000 barrels last week. The closely watched government survey from the Energy Information Administration is due at 1530 GMT later today.
"All in all, we continue to see a difficult choppy trading environment amidst mixed macro guidance in which politics has become a larger ingredient," energy consulting firm Ritterbusch and Associates said in a note.
President Barack Obama continued to push for the taxation of top earners. He said in a televised interview Tuesday that the Republicans' proposal, which doesn't raise tax rates on high-income Americans, was out of balance but there was potential for a fiscal deal.
An impasse on the U.S. fiscal cliff ahead of the January deadline is "likely to weigh on market sentiment heading into the year-end," Singapore-based OCBC said in a note.
In Europe, finance ministers struggled to agree on the region's single banking supervisor and will meet again next week to decide, ahead of the year-end deadline.
The market will also closely track U.S. non-farm payroll data due Friday for signs of economic health. The payroll data is expected to be weak due to Hurricane Sandy last month.
Oil prices are also supported by Middle East tensions. Iran has claimed it captured a U.S. drone over Iranian airspace in the Persian Gulf but the U.S. Navy has denied any such claims.
J.P. Morgan analysts say major buyers of Iranian crude oil may be able to show that their average Iranian crude imports were lower in 2012 compared to 2011, allowing them to extend waivers on sanctions imposed by the U.S.
Nymex reformulated gasoline blendstock for January--the benchmark gasoline contract--fell 9 points to $2.6881 a gallon, while January heating oil traded at $3.0141, 101 points higher.
ICE gasoil for December changed hands at $935.25 a metric ton, up $1.25 from Tuesday's settlement.
