Crude-oil futures traded higher in Asia on Wednesday, responding to expectations of easing measures by the European Central Bank and an expected drop in weekly oil stockpiles.
Crude continued the rising trend from the past two days following a price collapse last week on concerns that China and the U.S. will need less oil to fuel their slowing economic growth.
Oil followed gains in Asian stocks and the euro amid expectations that the ECB may cut interest rates at a meeting later Wednesday in a bid to help stabilize market sentiment.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $84.80 a barrel at 0656 GMT, up $0.51 in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose $0.29 to $99.13 a barrel.
"Further choppy or consolidative price behavior will continue through most of this week, assuming no major shockers out of the euro zone," said Jim Ritterbusch of Ritterbusch & Associates.
Crude prices climbed after unexpectedly upbeat data on the U.S. services sector triggered hope of higher fuel demand.
Investors also await the U.S. government survey of weekly oil inventories from the Energy Information Administration later Wednesday. According to a Dow Jones Newswires poll, U.S. oil stockpiles are expected to have dropped 500,000 barrels for the week ended June 1, which would be the first decline in nine straight weeks.
The American Petroleum Institute, an industry group, Tuesday reported a drop of 1.765 million barrels to 384.1 million barrels in the week. The EIA data is due at 1430 GMT.
In other news, Iran is expected to attempt to shore up support from Russia and China during a closely watched summit of Central Asian leaders beginning Wednesday in Beijing, as it deals with rising pressure from the U.S. and Europe over its nuclear program.
The European Union's trade sanctions against Iran set in on July 1, but analysts say the oil market will remain well supplied even with a drop in Iranian exports.
"Even with a further drop in Iranian exports, we see the global crude balance as adequately supplied," said analysts at Morgan Stanley in a note.
Under the bank's base scenario, Iran's oil exports will fall 150,000 barrels a day when the sanctions set in, but they could fall as much as 575,000 barrels a day.
Morgan Stanley's analysts say that while Iran is likely to discount its oil exports, other Middle East producers could reduce their official selling prices to compete with Iranian oil, which would put additional pressure on global prices.
Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--rose 13 points to $2.6860 a gallon, while July heating oil traded at $2.6332, 4 points lower.
ICE gasoil for June changed hands at $850.50 a metric ton, up $2.50 from Tuesday's settlement.
Write to Jacob Gronholt-Pedersen at jacob.pedersen@dowjones.com
