Oil futures edged higher early Wednesday, with traders awaiting official data on U.S. crude inventories after industry figures showed a large rise.
Price action
- West Texas Intermediate crude for December delivery CL.1, +1.01% CL00, +1.01% CLZ22, +1.01% rose 43 cents, or 0.5%, to $85.75 a barrel on the New York Mercantile Exchange.,
- December Brent crude BRNZ22, +0.66%, the global benchmark, was up 36 cents, or 0.4%, at $93.88 a barrel on ICE Futures Europe. January Brent BRN00, +0.63% BRNF23, +0.63%, the most actively traded contract, was up 31 cents, or 0.3%, at $92.05 a barrel.
- Back on Nymex, November gasoline RBX22, +0.35% rose 0.2% to $2.922 a gallon, while November heating oil HOX22, +0.57% was up 0.3% at $3.977 a gallon.
- November natural gas NGX22, -1.48% fell 0.8% to $5.566 per million British thermal units.
Market drivers
The American Petroleum Institute, an industry group, late Tuesday reported that U.S. crude inventories rose by 4.5 million barrels last week, according to a source and news reports. Gasoline inventories fell 2.3 million barrels, while distillate stocks were up 600,000 barrels.
More widely followed official data from the Energy Information Administration is due Wednesday morning. Analysts surveyed by S&P Global Commodity Insight, on average, look for crude inventories to fall by 800,000 barrels, gasoline stocks to decline by 1.6 million barrels and distillate inventories to drop 1.5 million barrels.
Analysts were also weighing remarks Tuesday by Prince Abdulaziz bin Salman, Saudi Arabia’s energy minister. Speaking at a conference in Riyadh, Prince Abdulaziz defended the OPEC+ decision to cut oil production by 2 million barrels a day and warned that the depletion of strategic crude reserves by oil-consuming countries could cause economic pain in the months ahead.
“It is my profound duty to make it clear to the world that losing emergency stock may become painful in the months to come,” he said, after complaining that strategic reserves had been used to “manipulate markets.”
Read: Depleting strategic oil reserves could prove ‘painful in the months to come’: Saudi energy minister
President Joe Biden last week announced the release of 15 million barrels of crude from the nation’s Strategic Petroleum Reserve, the final tranche of a 180 million-barrel release announced in March. The U.S. move was coordinated with a number of other large oil-consuming nations in response to surging prices that had taken crude to roughly 14-year highs above $120 a barrel following Russia’s invasion of Ukraine.
“Given the price action since OPEC+ announced cuts, some could argue that it has helped to stabilize prices in the immediate term. However, with cuts set to last until the end of 2023, the market is expected to tighten over the course of next year,” said Warren Patterson, head of commodities strategy at ING, in a note.
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