Singapore: Oil was little changed below $80 on Wednesday after an industry report showed US crude inventories climbed more than expected on growing imports, while distillate stockpiles tumbled.
Tuesday’s report from the American Petroleum Institute (API) showed a larger-than-forecast 4.1-million-barrel drop in distillate fuel supplies last week, including heating oil and diesel.
“Yesterday’s API data was quite mixed,” said Serene Lim, a Singapore-based oil analyst at ANZ.
US crude futures for April fell 21 cents to $79.47 a barrel by 8:58am, London ICE Brent slid 28 cents to $77.90.
The front-month US contract on Tuesday hit a seven-week intra-day high of $80.95 after the euro rebounded from a 9-month low against the dollar.
“The conditions are still rather difficult for prices to stay above $80 because we are not looking at very firm US economic data yet,” Lim said. “Oil goes up and people profit-take and then it comes down again.”
Oil touched $83.95 a barrel in New York on 11 January , its highest price in 15 months.
Analysts forecast data from the U.S. Energy Information Administration (EIA) due out on Wednesday at 9:00pm, would show a 1.4 million-barrel increase in crude stocks, a 900,000-barrel drop in distillates and a 600,000-barrel gain in gasoline.
US gasoline stocks rose 900,000 barrels in the week to 26 February, the API said.
Refinery maintenance in Asia and sustained northern hemisphere heating demand have raised expectations that a distillate surplus held in floating storage will dwindle.
Asian gas oil crack spreads, the premium at which the fuel trades over crude oil, reached their widest level in almost a year on Tuesday.
But depressed fuel oil values are cutting demand for heavy sour crude, forcing producers to deepen discounts to some regions.
Top world oil exporter Saudi Arabia cut the official selling price of most of its crude grades in April to customers in Asia, state oil company Saudi Aramco said on Tuesday.
Investors have looked to wider economic data over the past year for signs of economic recovery and a potential rebound in energy demand.
Opec meets next on 17 March and ministers are already suggesting there will be no change to current output quotas.
“Despite the fact the global economy is gradually recovering, demand has not increased significantly enough to make us reconsider our production ceiling,” Iraqi Oil Minister Hussain al-Shahristani told Reuters on Tuesday.