Weak start for oil prices ahead of data dump

There was a muted start Tuesday for crude oil prices following steady gains as investors shift their focus to market data. File photo by Monika Graff/UPI.

April 11 (UPI) — Oil prices limped into the trading day early Tuesday after steady gains as investors took stock of the latest supply and demand trends.

Signals of a tighter market in late March helped pull crude oil prices back above $50 per barrel. The market was in a slump in signs of steady gains in U.S. crude oil inventories, but reversed course after some of the signs of a glut waned. U.S. military airstrikes last week on suspected chemical weapons sites in Syria stoked geopolitical tensions in the oil-rich Middle East. The fallout from the strikes widened the divisions among some of the largest oil producers in the world.

Midweek attention may focus more on fundamental aspects of the market than on geopolitical tensions. A survey of sentiment from S&P Global Platts finds there may be a build in U.S. crude oil inventories of 125,000 barrels from last week, but a decline of 1.8 million barrels for gasoline.

Oil prices were more or less flat as investors waited out the day to find out whether industry data provided by the American Petroleum Institute would confirm the expectations from Platts. The price for Brent crude oil was down 0.14 percent to $55.90 per barrel about half an hour before the start of trading in New York. West Texas Intermediate, the U.S. benchmark price for oil, was down 0.11 percent to $53.02 per barrel.

Official data from the U.S. Energy Information Administration will be published about an hour after U.S. markets open Wednesday.

Global supplies of crude oil are in a tug-of-war over fluid production activity. U.S. crude oil production has responded to improved market conditions to pass 9 million barrels per day. Libya, meanwhile, has been a swing factor and conflict-related declines have weighed on market sentiment in recent days.

Libya is exempt from a production deal coordinated by the Organization of Petroleum Exporting Countries. Russia is the largest contributor to the deal to curb production among non-member states and pledged to meet its obligations by the end of the month.

Analysts this week said the market may be primed for an extended rally given the number of factors contributing to bullish trends. Geoffrey Craig, the oil futures editor for Platts, said in a daily emailed newsletter that refinery trends in the United States, the world’s leading economy, are swaying movement for crude oil prices.

“The main catalyst for crude trading in the $50s now seems to be the increase in U.S. refinery demand, rather than the OPEC supply cuts,” he said.


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