Oil prices down ahead of US stockpiles report
Oil prices edged lower in Asian trade today as dealers looked ahead to a US stockpiles report expected to indicate bullish demand in the world’s top crude consumer
New York’s main contract, West Texas Intermediate for February delivery, was down 15 cents at USD 99.40 in mid-morning trade while Brent North Sea crude for February eased 27 cents to USD 111.71.
Despite crude coming under pressure in Asian trading hours, Ric Spooner, chief market analyst at CMC Markets in Sydney, said prices retained support as traders anticipated the US report would show a significant fall in petroleum supplies.
Traders are “positioning themselves for the possibility of some good inventory figures”, Spooner told AFP.
The report from the US Department of Energy is usually released on Wednesdays, but it has been delayed until today due to the Christmas holidays.
Analysts expect a decline in US supplies of 2.2 million barrels, according to a survey by the Wall Street Journal. This would mean a fourth consecutive drop after a 10-week run of rises that added 35 million barrels to total stockpiles.
A dip in US stockpiles indicates strong demand in the world’s biggest economy and oil consuming nation, propping up prices.
Investors are also keeping an eye on developments in oil producer South Sudan, where output has been threatened following a wave of deadly ethnic violence.
The United Nations said Thursday it was speeding up reinforcements to its peacekeeping force in the African state amid ferocious fighting in its oil-producing north. Analysts say the fledgling producer usually exports about 220,000 barrels a day to Japan, Malaysia and China.