Oil futures crept higher in electronic trade Tuesday, overcoming headwinds from a rising U.S. dollar as investors positioned themselves ahead of a crude inventory report due later in the day.
Benchmark U.S. crude oil for September delivery added 9 cents, or 0.1%, to $106.20 a barrel, extending a 14-cent gain in the regular New York Mercantile Exchange session Monday.
Brent crude edged 4 cents higher for a fractional gain to $109.01 a barrel, more than erasing its 2-cent drop Monday.
The advance Tuesday came despite a rise for the U.S. dollar, which is often negative for dollar-denominated commodities such as crude oil, which become more expensive in foreign-currency terms.
Later Tuesday, the markets were slated to receive weekly U.S. oil inventory data from the American Petroleum Institute. A Platts survey of analysts showed expectations for a drawdown of 1.5 million barrels for the week ended Aug. 9.
Citi Futures analysts, whose estimate for a 1 million to 2 million barrels drop in U.S. oil stockpiles put them within the consensus, said that lower inventories, in and of themselves, wouldn’t necessarily be a bullish sign for crude.
“Although a simple draw[down] might count as supportive in some circles, we note the decline will compare with a 3.7 million-barrel drop in the same last year, and a 1.9 million-barrel five-year average decline, and so it would take a larger drop to send a clear bullish signal on a seasonally adjusted basis,” they wrote late Monday.
Citi Futures’ current recommendations is for a short position on Nymex crude with a protective buy-stop at $106.70 a barrel.
The API is slated to release its inventory data at 4:30 p.m. U.S. Eastern time, though the market tends to react more to the U.S. Energy Information Administration inventory report, which is due out Wednesday at 10:30 a.m. Eastern time.
As for other petroleum-product stocks, the Platts survey showed an average forecast drop of 2 million barrels for gasoline and a fall of 1 million barrels for distillates, which include heating oil.
In Tuesday trading, September gasoline added a penny, or 0.3%, to $2.91 a gallon, while September heating oil sat flat at $3.03 a gallon.
Meanwhile, natural gas for September delivery rose a fraction of a cent to $3.31 per million British thermal units
Source : Marketwatch
