MW: Oil futures edge higher on hopes of a rescue plan for Greece
The American Petroleum Institute says crude supplies rose sharply last week
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Oil futures traded marginally higher on Wednesday, as hopes of a rescue plan for Greece buoyed sentiment and overshadowed data showing a sharp rise in U.S. crude inventories.
Crude oil for March delivery gained 14 cents to $73.89 a barrel in electronic trading on Globex. Earlier, the contract hit an intraday high of $74.36 a barrel.
Oil prices rose 2.5% on Tuesday following media reports that the German government is mulling a rescue plan for Greece, whose debt woes have put the euro and Greek assets under heavy selling pressure.
Speculation about a rescue plan continued on Wednesday, boosting U.S. stock futures and European equities.
European Union leaders will meet in Brussels on Thursday, with Greece's debt problems expected to dominate the meeting, which was originally called to discuss the long-term economic outlook.
Positive sentiment in the financial markets helped boost oil prices and weighed on the dollar, even as traders received more evidence of weakness in energy demand.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies increased by 7.2 million barrels during the week ended Feb. 5. Analysts polled by Platts expected a 2-million-barrel increase. Refinery utilization fell by one percentage point to 77% compared to the previous week.
"A reduced demand for crude oil from U.S. refineries was the major underlying factor for the build-up in stocks," said analysts at Commerzbank AG.
"Hence, there are no signs that oil demand in the world's largest oil consuming country is picking up," they said in a note to clients.
Gasoline stocks rose by 1.55 million barrels last week, while distillate supplies declined by 1.5 million barrels, the API also said.
Analysts expected an increase of 1 million barrels in gasoline inventories and a decline of 1.75 million barrels in distillate stockpiles.
Traders will have to wait longer than usual to get data from the Energy Information Administration. The EIA will release its weekly report on petroleum supplies on Friday, instead of Wednesday, because of inclement weather.
The EIA offices, along with the rest of the federal government in Washington D.C., remain closed due to heavy snow last weekend and warnings of another winter storm on the way.
The EIA's weekly report on natural-gas supplies will also be released on Friday, instead of Thursday.
