Oil futures rose Thursday, with the U.S. benchmark attempting to snap a six-day losing streak as traders awaited data that’s expected to show a further rise in crude inventories.
West Texas Intermediate crude for April delivery
rose 82 cents, or 1.1%, to $74.77 a barrel on the New York Mercantile Exchange, trimming its weekly decline to 2.3% after it fell for a sixth straight session on Wednesday.
April Brent crude
the global benchmark, rose 88 cents, or 1.1%, to $81.44 a barrel on ICE Futures Europe. May Brent
the most actively traded contract, was up 83 cents, or 1%, at $81.28 a barrel.
Back on Nymex, March gasoline
rose 0.3% to $2.344 a gallon, while March heating oil
edged up 0.2% to $2.719 a gallon.
March natural gas
fell 1.4% to $2.144 per million British thermal units.
Crude has struggled in February as investors recalibrated expectations for Federal Reserve rate hikes. Fed action has stoked fears that the effort to bring down inflation could trigger a sharp economic slowdown that would weigh on demand for crude and fuel.
Minutes of the Fed’s Jan. 31-Feb. 1 policy meeting released Wednesday afternoon affirmed that policy makers were solidly behind plans to continue raising rates, but offered no major surprises.
Analysts said rising U.S. inventories were likely to keep a lid on prices.
Crude will continue to struggle because “U.S. inventories remain sky-high, a likely symptom of higher-than-expected U.S. and Russian production and the loss of gas-to-oil switching, which continue to leave global markets awash with current inventory,” said Stephen Innes, managing director of SPI Asset management, in a note.
A sharp rise in natural-gas prices following Russia’s invasion of Ukraine, which took place a year ago Friday, had led some European power providers to burn oil, boosting demand for crude. Natural-gas prices subsequently tumbled.
The American Petroleum Institute, an industry trade group, late Wednesday said U.S. crude inventories jumped by 9.9 million barrels last week, according to a source citing the data, while inventories of gasoline and distillates also rose.
Official inventory data from the Energy Information Administration was due later Thursday. Analysts surveyed by S&P Global Commodity Insights, on average, look for crude inventories to show a 1 million barrel rise, while gasoline stocks were expected to fall 1.3 million barrels and distillate stocks were expected to be flat.
The weekly petroleum data is delayed by a day due to Monday’s Presidents Day holiday.
U.S. natural-gas futures have plunged more than 20% in February and more than 47% so far in 2023, slumping in reaction to mild winter weather and strong domestic supplies.
Commodities Corner: Why the wait for lower heating bills may last for ‘months to come’
Weekly EIA data on natural-gas storage was also due Thursday morning. Analysts surveyed by S&P Global Commodity Insights, on average, were looking for a withdrawal of 72 billion cubic feet, or bcf, from domestic storage.
A 72 bcf withdrawal would be far smaller than the five-year average drawdown of 177 bcf and would be just over half the size of the 138 bcf withdrawal seen in the same week last year, according to S&P Global Commodity Insights. It would leave U.S. gas storage levels at 2.194 trillion cubic feet, widening the storage surplus to 288 bcf, or about 15%, above the five-year average, while the surplus to 2022 inventory levels would grow to 394 bcf, or almost 22%, above the year-ago level, according to S&P.
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