BLBG: Oil Little Changed Before Report Forecast to Show Supply Gains
By Grant Smith
March 10 (Bloomberg) -- Oil traded little changed before a report forecast to show that crude inventories grew for a sixth week in the U.S., the world’s largest energy user.
Crude pared earlier losses as the dollar reversed gains against the euro, reinforcing oil’s appeal for hedging inflation. An Energy Department report today is forecast to show supplies climbed by 2 million barrels. OPEC said it will need to pump more oil than previously forecast this year after cutting its outlook for production of natural gas liquids.
“The market is taking direction from the dollar,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “Prices are pretty range-bound as we await the release of inventory data. Demand in the U.S. looks rather anemic, but data over the next few weeks may show an improvement.”
Crude for April delivery was at $81.77 a barrel, 28 cents higher, in electronic trading on the New York Mercantile Exchange as of 1:23 p.m. London time. It fell as low as $81.05 earlier today. Brent crude for April delivery rose 32 cents to $80.23 a barrel on the London-based ICE Futures Europe exchange.
The Organization of Petroleum Exporting Countries, which produces about 40 percent of the world’s oil, predicted members will need to produce 28.94 million barrels a day to satisfy demand in 2010 in a monthly report today. That’s about 190,000 barrels a day more than last month’s projection.
The U.S. dollar slipped to trade at $1.3607 against the euro, compared with $1.3545 earlier today.
API Report
Crude fell yesterday after the American Petroleum Institute said inventories rose by 6.5 million barrels in the week ended March 5.
The Energy Department report will probably show that U.S. inventories of crude rose from 341.6 million barrels, according to the median of 17 analyst responses in a Bloomberg News survey. The department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington.
“Demand in the U.S. has been very depressed,” said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. “That’s looking like it’s starting to pick up and get to more average levels, and we expect a gradual improvement in prices. The risk is that the inventory numbers will not be so positive today.”
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
