Oil prices inched higher in Asian trade on Wednesday on hopes that a key US stockpiles report would beat bearish forecasts, easing concerns about tepid demand in the world's top crude consumer.
New York's main contract, West Texas Intermediate for May delivery, was up two cents at $101.77 a barrel in mid-morning trade while Brent North Sea crude for June rose 14 cents to $109.41.
“Prices are holding steady as investors are hoping that US inventories out Wednesday would not be as bearish as expected,” Ric Spooner, chief market analyst at CMC Markets in Sydney, told AFP.
“But investors remain nervous over concerns overall US stockpile levels seem to be pretty high, and that the upcoming summer driving season may not do enough to boost demand,” he said.
The Department of Energy's weekly report on US crude-oil supplies is expected to show an increase of 2.4 million barrels, according to the consensus of analysts polled by Dow Jones Newswire.
In the week ending April 11, crude supplies swelled to a record 394.1 million barrels, the highest level since the DoE began the weekly report in 1982.
Crude supplies jumped 10 million barrels, much higher than the 1.5 million expected.
Investors continue to “keep a watching brief” on developments in crisis-hit Ukraine, Spooner said.
The ex-Soviet state on Tuesday relaunched military operations against pro-Kremlin separatists, hours after US Vice-President Joe Biden ended a two-day Kiev visit in which he warned Russia over its actions in the former Soviet republic.
Ukraine is a major conduit for Russian natural gas to Western Europe and traders are concerned that a full-scale armed conflict in the region will disrupt supplies and send prices rocketing.
“The Ukraine situation continues to provide broad support to oil prices and is curbing losses when there is downside pressure,” Spooner said. - Sapa-AFP