SINGAPORE, (AP) – Oil prices regained ground Wednesday as the market adjusted to declines the day before and traders awaited release of the weekly U.S. inventory report.
Light sweet crude for December delivery rose 21 cents to $58.49 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange. On London’s ICE Futures exchange, December Brent crude gained 31 cents to $59.15 a barrel ahead of its expiration later Wednesday.
After declining 25 percent from a summer peak above $78 a barrel, oil prices have hung close to the $60 level over the past month, even as the Organization of Petroleum Exporting Countries announced a 1.2 million barrel a day production cut and violence in Nigeria raised supply worries.
“For the first time in a while the market appears in a somewhat somnolent state: comfortable with current price levels and lulled by the lack of urgency from the geopolitical sphere,” Mike Fitzpatrick, a vice president for energy risk management at Fimat USA, told Dow Jones Newswires.
Commodities analyst Mark Pervan, with Daiwa Securities in Melbourne, Australia, suggested the market was positioning ahead of the weekly U.S. inventories report, which comes out later Wednesday.
“Generally, most of the price catalysts for price taking are not active,” Pervan said. “Instead we have mild winter weather in the United States, quiet in the Middle East and we’re between OPEC meetings.”
Last week showed declines in U.S. supplies of gasoline and diesel fuel, though oil and natural gas supplies are still ample — above the average for this time of year.
Market participants are bracing for what could be another mixed report.
U.S. commercial crude inventories are expected to have risen by an average of 900,000 bbl in the week to Nov. 10, a Dow Jones survey of eight analysts showed.
Any bearish signal from this, however, is likely to be offset by a predicted 1 million-bbl drop in stocks of distillates, comprising diesel and heating oil.
While inventories remain ample, industry observers have been urging participants to look beyond year-ago comparisons to the pace of recent stockdraws.
In other Nymex trading, heating oil futures rose 0.58 cent to $1.6690 a gallon, and unleaded gas rose marginally to $1.5450 a gallon. Natural gas futures increased 3.7 cents to $8.014 per 1,000 cubic feet.
Last week the International Energy Agency trimmed its outlook for 2006 global oil demand growth to 1.1 percent from 1.2 percent. Demand growth for 2007 was kept steady at 1.7 percent.