Oil futures edged lower early Wednesday, feeling modest pressure on uncertainty over the demand outlook as traders await official data on U.S. crude inventories and continue to monitor cold weather that has crimped production in North Dakota and other areas.
Price moves
-
West Texas Intermediate crude for March delivery
CL00,
-0.32%CL.1,
-0.32%CLH24,
-0.32%
fell 23 cents, or 0.3%, to $74.14 a barrel on the New York Mercantile Exchange. -
March Brent crude
BRN00,
-0.41%BRNH24,
-0.41%,
the global benchark, declined 30 cents, or 0.4%, to $79.25 a barrel on ICE Futures Europe.
Market drivers
The American Petroleum Institute, an industry trade group, reported late Tuesday that U.S. crude inventories fell by 6.7 million barrels last week, according to a source citing the data. However, gasoline inventories were seen up 7.2 million barrels. Distillates dropped by around 250,000 barrels.
While the crude oil figure was “largely constructive,” the sharp rise in gasoline stocks weighed on demand expectations, Ewa Manthey and Warren Patterson, strategists at ING, said in a note.
More closely followed inventory data from the Energy Information Administration is due Wednesday afternoon. Analysts surveyed by S&P Global Commodity Insights, on average, expect crude inventories to show a fall of 3 million barrels in the week ended Jan. 19. Gasoline inventories are expected to show a rise of 1 million barrels.
The S&P survey found that analysts expect U.S. crude production to decline by 900,00 barrels a day to 12.4 million barrels a day due to extreme cold weather and operational challenges shutting in output, particularly in North Dakota and Texas.
See: Oil traders care more about North Dakota weather than Red Sea missile attacks
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