IV:Crude oil futures higher ahead of U.S. supply data, FOMC minutes
Investing.com - Crude oil futures eased up to a three-day high during European morning hours on Wednesday, as hopes the global economic recovery was gaining momentum provided support while traders looked ahead to weekly supply data on U.S. oil stockpiles.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD97.20 a barrel during European morning trade, up 0.1% on the day.
New York-traded oil prices held in a tight range between USD97.00 a barrel, the daily low and a session high of USD97.36 a barrel, the strongest level since February 15.
Rising global equities markets boosted investor confidence, with the S&P 500 index closing at a five-year on Wall Street, while European equities surged following a report which showed that the ZEW index of German economic sentiment hit a 34-month high in February.
U.S. shares and crude oil have traded in tandem in recent weeks, on the belief share prices act as a proxy for economic sentiment and are a bellwether for oil demand.
Oil traders now looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Thursday’s government report could show crude stockpiles rose by 2.4 million barrels.
The report comes out a day later than usual due to the President’s Day holiday in the U.S. earlier in the week.
Market players also awaited the release of the minutes of the Federal Reserve’s January meeting later in the day for hints regarding the central bank’s attitude towards monetary policy.
Any policy pause signal from the Fed minutes may send the U.S. dollar higher, pressuring dollar-denominated commodities.
U.S. housing data due later in the day will also be in focus as investors seek more cues on the country's economic health.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery dipped 0.1% to trade at USD117.46 a barrel, with spread between the Brent and crude contracts standing at USD20.26 a barrel.
The gap between two contracts contracted after Enterprise Products Partners said on Tuesday that the flow of oil supplies through its Seaway pipeline will increase, helping reduce a glut in the U.S. Midwest.
According to a company executive, the Seaway Pipeline, which moves oil out of Cushing, will increase flows to an average of 295,000 barrels a day between February and May, up from nearly 180,000 barrels a day in January.
The pipeline expanded its capacity from 150,000 to 400,000 barrels a day in early January but said on January 31 that restrictions will limit full capacity flows on the key pipeline until late 2013.
