Singapore: Oil hovered above $91 a barrel on Thursday ahead of US weekly inventory data expected to show a drawdown in crude stocks for the fourth consecutive week due to an abnormally icy winter.
US crude for February delivery edged up six cents to $91.18 a barrel by 0206 GMT. Prices have traded in a tight range near $91 since hitting a 26-month high of $91.88 on Monday.
“The oil market continues to alternate small gains with small declines, as prices idle quietly on light between-holiday volume,” said Timothy Evans, energy analyst at Citi Futures Perspective.
The oil market may get the impetus it needs to break through its trading range with the release of the US Energy Information Administration fuel stocks report later on Thursday.
Analysts expected a 2.6 million barrel drop in crude inventories last week, which would be the fourth consecutive drawdown in the world’s largest oil user.
Gasoline stocks were forecast up 1.4 million barrels, while distillates fell 600,000 barrels, according to a Reuters poll.
The industry group American Petroleum Institute confounded analysts expectations on Wednesday by reporting a 3.1 million barrel rise in crude, while gasoline supplies dropped 3.1 million barrels in the week to 24 December. Distillates rose 1.4 million barrels.
“The API data is certainly known to be more volatile than the more definitive EIA report, so we would wait to see those numbers before making any big decisions,” Evans said.
Warmer weather, dollar
Severe cold conditions in the US Northeast, slammed by one of the worst blizzards on record over the Christmas holiday, has depleted fuel stocks and added support to oil prices.
Warmer weather was expected to return this weekend for the world’s top heating oil market, curbing heating fuel demand and pressuring crude prices.
Bearish sentiment was offset by a weaker dollar, which hit a seven-week low against the yen and a 28-year low against the Australian currency after traders took falls in US bond yields as a cue to sell it.
Oil and dollar-denominated commodities often move inversely to the dollar. A weaker dollar typically lifts oil prices as it lowers the value of greenbacks paid to producers while making it less expensive for oil consumers using other currencies.
Technicals indicated oil prices may surge to $92.50 after ending its consolidation period.