By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Crude-oil futures gained in electronic trading Tuesday ahead of the release of a U.S. weekly inventory report later in the day.
Crude for February delivery CL2G +0.70% added 65 cents, or 0.7%, to $101.96 a barrel on the New York Mercantile Exchange during Asian trading hours.
The gains put oil on track to snap a three-day losing streak, with prices pressured by, among other factors, concerns about the spread of Europe’s debt crisis and the outlook for energy demand.
But some optimism about efforts to tackle the region’s debt woes after a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy on Monday helped boost sentiment across commodity and equity markets during Asian trading Tuesday.
A weaker dollar also lent support to oil, with the dollar index DXY -0.10% , which tracks the U.S. currency against six others, falling to 80.895, from 81.001 in North American trade late Monday.
A softer dollar tends to encourage buying in dollar-priced commodities such as oil, as it makes them cheaper to holders of other currencies.
Gains for oil futures came ahead of weekly U.S. crude inventory reports, with the American Petroleum Institute releasing data Tuesday, followed by the more closely watched U.S. Energy Information Administration report, due Wednesday.
Analysts polled by Platts expect the data to show a 1-million-barrel draw in U.S. commercial crude oil inventories for the week ending Jan. 6.
Virginia Harrison is a MarketWatch reporter based in Sydney.
