Energy Information Administration will report inventories at 10:30 a.m. Eastern
By Nick Godt & Polya Lesova, MarketWatch
NEW YORK (MarketWatch) -- Oil futures rose on Wednesday, rebounding from early losses after upbeat U.S. economic reports on private sector jobs and the service sector of the economy, and ahead of a government report on petroleum inventories.
Crude oil for March delivery was up 4 cents at $77.25 a barrel in electronic trading on Globex.
The ADP employment report indicated that jobs were lost in January for the 24th month in a row. Still, the 22,000 jobs lost were the fewest since 22,000 jobs were added in January 2008. In December, a revised 61,000 jobs were lost, compared with the 84,000 originally reported, ADP said.
Oil held to gains after a midmorning report from the Institute for Supply Management showed the services sector rebounded in January, but not as much as economists expected.
Over the last two sessions, crude oil has gained more than $4, recouping half of their decline in January.
The gains were "largely driven by economic optimism and reduced risk aversion," said analysts at Commerzbank AG in a note to clients.
"The renewed price increase, however, cannot be explained from a fundamental perspective. The market continues to be well-supplied with oil," they said.
Traders received more evidence of that late Tuesday, when the American Petroleum Institute reported that U.S. crude supplies rose by 4.7 million barrels during the week ended Jan. 29.
Gasoline stocks dropped 1.16 million barrels and distillate supplies declined by 1 million barrels, the API also said.
The Energy Information Administration will release its inventory report at 10:30 a.m. Eastern on Wednesday. Analysts polled by Platts expect a decline of 1 million barrels in crude stocks and an increase of 1.5 million barrels for gasoline stocks.
They also project a decline of 1.2 million barrels in middle distillate inventories. Refinery utilization is expected to rise 0.25 of a percentage point to 78.75%.
Also on Globex, March reformulated gasoline was up 2 cents at $2.04 a gallon and March heating oil was up 1 cent at $2.04 a gallon.
March natural-gas futures rose 8 cents, or 1.5%, to $5.54 per million British thermal units.
