Oil Futures Climb to Two-Week High Ahead of Inventory Data

U.S. crude-oil futures ground higher Tuesday, pushing to a two-week high as investors await government data on U.S. oil supplies.

Light, sweet crude for April delivery settled up 48 cents, or 0.5%, at $92.54 a barrel on the New York Mercantile Exchange, the fourth-straight session of gains and the highest settlement since Feb. 27.

Brent crude on the ICE futures exchange fell 57 cents to settle at $109.65 a barrel.

Oil prices continued the bounce from lows near $90 a barrel earlier this month. Analysts and traders said they were looking ahead to Wednesday's release of U.S. oil inventories data for signs on whether the rally can be sustained.

U.S. crude-oil stockpiles are expected to rise by 2.4 million barrels in data due 10:30 a.m. EDT Wednesday from the Energy Information Administration, according to a Dow Jones Newswires survey of analysts. If the estimate is correct, oil inventories will be at the highest level ever for this time of year.

The American Petroleum Institute, an industry group, will release its own data at 4:30 p.m. EDT Tuesday.

Gasoline stocks are seen falling by 1.2 million barrels in the EIA data, and stocks of distillate, which include heating oil and diesel, are seen falling by 1.9 million barrels.

Oil prices have slumped from highs near $98 a barrel earlier this year amid rising domestic supplies. But improving economic data in recent weeks, including Friday's larger-than-anticipated increase in U.S. employment, have helped halt the decline.

"With overall improving economic data, I'd say there is a slight bias higher, but not that much given that inventories are still as high as they are in the U.S," said Kyle Cooper, managing partner at IAF Advisors in Houston. He added that in weekly EIA data, "Crude inventories are probably going to build again, crude production is still high, crude demand is still low."

Some analysts said this week's recovery appeared to be technically driven after U.S. prices failed to make a renewed push below $90 a barrel, which is a key support level on trading charts.

But market watchers added they were still scratching their heads over the rise, as the fundamentals for the global oil market haven't changed and latest assessments may point to steady, rather than higher prices.

OPEC said in its monthly report that non-OPEC output, led by growth in output from U.S. shale-oil fields, will rise by 1 million barrels a day this year.

The EIA forecast in its short-term energy outlook Tuesday that U.S. crude-oil output will top net imports for the first time in more than 17 years this autumn.

News that more of the world's oil supply is in the hands of producers that wouldn't regularly adjust output to support prices, as the Organization of the Petroleum Exporting Countries often does, would be a stabilizing force for global oil prices, analysts said.

April-delivery reformulated gasoline blendstock futures settled 0.22 cent lower at $3.1502 a gallon. April heating oil settled 2.07 cents lower, at $2.9484 a gallon.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Brent Crude Oil : $54.46/BBL 0.96%
Light Crude Oil : $51.68/BBL 1.21%
Natural Gas : $3.44/MMBtu 1.99%
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