By Victor Reklaitis and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) — Crude-oil futures rose Tuesday, ahead of weekly data expected to show a decline in supplies and as rising tensions in Syria remained a concern.
Crude for July delivery CLN3 +0.44% added 49 cents, or 0.5%, to $98.26 a barrel on the New York Mercantile Exchange.
The American Petroleum Institute will issue its weekly report at 4:30 p.m. Eastern time. More closely watched figures from the U.S. Energy Information Administration (EIA) are due Wednesday at 10:30 a.m. Eastern.
Analysts expect that U.S. commercial crude-oil stocks declined 1 million barrels for the week ended June 14, according to a Platts survey. The drop is expected to stem from a reduction in crude-oil imports, which have been volatile recently.
A drawdown of 1 million barrels would be “more than double seasonal norms,” with the EIA’s five-year average showing oil stocks typically fall by about 400,000 barrels during this reporting period, Platts said.
Analysts also expect a weekly rise in gasoline stocks of 1.2 million barrels, and an increase of 300,000 barrels for distillate stocks, which include heating oil and diesel fuel.
Reports on crude-oil inventories released last week were bearish, with both the API and EIA reporting supply increases, even as analysts had expected no change in inventory levels.
Syria is also in focus for energy investors, with the U.S. saying late last week it would increase aid to the rebels in Syria who have been fighting against the regime of President Bashar al-Assad in a bloody civil war. U.S. oil futures on Friday surged 1.2% following the development.
There are concerns that violence in Syria will extend to other parts of the oil-rich Middle East. Russian President Vladimir Putin reportedly told U.S. President Barack Obama on Monday that he doesn’t support the U.S. decision to arm the rebels, but that he does support talks aimed at ending Syria’s war.
Putin and Obama were among leaders attending the Group of Eight summit of industrialized nations in Northern Ireland. The meeting is expected to wrap up Tuesday. The geopolitical tensions in Syria and Turkey are helping to keep oil prices at multi-month highs, analysts at Commerzbank wrote in a note. “Syria and Turkey may not be significant oil producers, but they do play an important role in the region’s overall stability,” the analysts wrote, adding that the friendlier signals sent by Iran’s newly elected president have been “virtually ignored.”
In Turkey, anti-government protests erupted in late May, challenging the decade-long leadership of Prime Minister Recep Tayyip Erdogan.
In Iran, President-elect Hassan Rohani said that he will take steps to resolve the standoff with the West over his country’s nuclear program, The Wall Street Journal reported. Ultimate power in Iran, however, rests with Supreme Leader Ayatollah Ali Khamenei.
In U.S. economic news Tuesday, housing starts increased in May, but the gain was below forecasts. Consumer prices also rose last month, but not as much as analysts expected.
On Monday, oil prices reversed course and fell 8 cents, with losses appearing to be triggered by the Financial Times reporting that Federal Reserve Chairman Ben Bernanke may say he is close to tapering the central bank’s $85-billion-a-month in asset purchases.
Bernanke is scheduled to hold a press conference Wednesday after the conclusion of the Fed’s two-day policy meeting, which will start later Tuesday. Read more about the Federal Reserve in the Capitol Report blog.
In other moves Tuesday, Brent crude for August delivery UK:LCOQ3 +0.46% rose 47 cents, or nearly 0.5%, to $105.94 a barrel, and natural gas for July delivery NGN13 +1.34% added 2 cents, or 0.6%, to $3.90 per million British thermal units. July gasoline RBN3 +0.74% gained 2 cents, or 0.6%, to $2.87 a gallon, while July heating oil HON3 +0.57% rose 2 cents, or 0.6%, to $2.97 a gallon.
Victor Reklaitis is a New York-based markets writer for MarketWatch. Follow him on Twitter @VicRek.
Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.
