Oil
prices steady ahead of U.S. stockpiles data
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[August 19, 2015]
By Lisa Barrington
LONDON (Reuters) - Oil prices steadied on
Wednesday ahead of U.S. oil data expected to show falling crude and
gasoline stockpiles, raising hopes of increased demand for crude.
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Prices consolidated after a six-week rout driven by global
oversupply and concerns about falling demand in Asian economies and
the United States.
U.S. government data on crude stockpiles is due at 10:30 a.m. EST
(1430 GMT) on Wednesday. A Reuters poll estimated on average that
commercial U.S. crude stocks fell by just under 800,000 barrels in
the week to Aug. 14.
The American Petroleum Institute reported on Tuesday that U.S. crude
stocks had fallen by an even greater margin - by 2.3 million barrels
in the week ended Aug. 14.
U.S. crude oil futures <CLc1>, also known as West Texas Intermediate
(WTI), were down 25 cents at $42.37 a barrel by 1140 GMT. The
front-month, September, U.S. crude oil contract is due to expire on
Thursday. North Sea Brent crude <LCOc1> was up 5 cents at $48.86 a
barrel.
U.S. oil production is at record levels and producer costs appear to
be declining, with no output scale-back anticipated.
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Bearish sentiment was exacerbated last week when repairs at a large
refinery in Whiting, Indiana caused a large stock build at Cushing,
Oklahoma, the delivery point for U.S. crude futures.
Oil has lost about a third of its value since June and prices have
been hovering just above six-year lows for the past week. The
downward trend has been driven by global oversupply and record
stockpile levels, analysts say.
"The recent drop in the price of oil confirms ... the global
commitment producers have to their current levels of (high) output,"
said Scott Cockerham, managing director Houston-based Conway
MacKenzie's Energy Advisory Services.
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Many analysts said they expect some temporary price stabilization as
people take profits from short positions. But they said the downward
price trend was likely to continue unless there was a significant
reduction in global supply.
"I think the market has pushed too low and too fast," ABN Amro
energy economist Hans van Cleef said. He added that, although he
could see oil prices rebounding in the coming weeks, he thought they
would remain low into next year.
ANZ bank said: "Any recovery in WTI prices from a six-year low may
be short-lived with the U.S. entering the slow demand period in
September."
(Additional reporting by Henning Gloystein in Singapore; Editing by
Christopher Johnson)
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