WSJ: OIL FUTURES: Crude Regains Ground As Equity Bounce Helps
By Sherry Su
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Crude oil futures regained some ground Thursday after Wednesday's hefty declines, as widespread gains in Asian and European equities markets helped to lift sentiment.
Traders switched their attention to the coming U.S. economic data from Wednesday's bearish U.S. oil inventories data. Meanwhile, continued dollar weakness also helped to support oil futures.
At 1200 GMT, the front-month January Brent contract on London's ICE futures exchange was up $0.65 at $78.53 a barrel.
The front-month January light, sweet, crude contract on the New York Mercantile Exchange was trading $0.38 higher at $76.98 a barrel.
The ICE's gasoil contract for December delivery was up $4.00 at $621.50 a metric ton, while Nymex gasoline for January delivery was up 133 points at 200.61 cents a gallon.
Crude oil futures lost more than 2% Wednesday after the U.S. Department of Energy reported a build of 2.1 million barrels in crude oil stocks and a huge increase of 4 million barrels in gasoline stocks last week.
Crude oil stocks in Cushing, Okla, rose for the fourth straight week by 1.4 million barrels to 30.9 million barrels, bringing the total increase over the past four weeks to 5.4 million barrels.
"At the current fill-up rate they would reach their previous peak in two weeks from now, just in time for the expiry of the January WTI contract," said Olivier Jakob, managing director of Swiss consultancy Petromatrix.
"Given the full contango on WTI we should expect to see a continuation in the recent trend of rising stocks in Cushing," he said.
However, some analysts said Wednesday's crude oil data may not be as bearish as they looked.
"The scope of the stock changes should be treated with caution," said Antoine Halff, an analyst at Newedge Group.
"The steep headline build seems somewhat at odds with other data points--imports, domestic output, refinery runs, deliveries into the Strategic Petroleum Reserve--which together point at a much shallower gain, if any at all," Halff said.
"Such inconstancy, which is far from unprecedented, could set the stage for a bit of a correction next week," he added.
Looking ahead, traders are waiting for the U.S. weekly jobless claims figures, due at 1330 GMT, and the ISM non-manufacturing index, due at 1500 GMT. Also on the radar is the interest rate decision by the European Central Bank at 1245 GMT.
The ECB is expected to outline its strategy to exit its low interest rate policy, which would give a boost to euro, analysts said.
-By Sherry Su, Dow Jones Newswires; +44(0)20-7842-9329; sherry.su@dowjones
