|
 "The lack of follow-through higher yesterday is a worry and
there's plenty of reason to be neutral here and observe carefully,"
PVM Oil Associates director and technical analyst Robin Bieber said.
Oil prices have risen more than 35 percent since hitting an almost
six-year low of $45.19 in January, in an ascent fueled by lower
industry spending and falling U.S. rig counts.
Benchmark Brent crude futures <LCOc1> were down $1.03 at $61.50 by
1114 GMT (06:14 a.m. EST), having fallen to a low of $61.11 earlier
in the session. U.S. crude <CLc1> traded at $52.89 a barrel, down 64
cents.
"The contracts will look very fragile and accident-prone if one or
two more contracts fail to hold key support," Bieber said.
Volumes were significantly reduced in early trading as several Asian
countries started the Lunar New Year holidays, which last for the
rest of the week.
BNP Paribas analysts said the recent surge in prices was premature
given record-high U.S. crude stocks.
"U.S. refinery outages, through seasonal maintenance and industrial
action, will weaken U.S. crude demand, exacerbating the crude stock
excess in the near term," oil strategists Gareth Lewis-Davies and
Harry Tchilinguirian said in a note to traders.
U.S. commercial crude oil stockpiles are already at their highest
since records began and are expected to have risen again last week
by 3.1 million barrels, a preliminary Reuters survey showed on
Tuesday. <EIA/S>
U.S. stocks data from industry group the American Petroleum
Institute is due later on Wednesday. <API/S>
[to top of second column] |
Instability in the Middle East helped support the market, however,
and Commerzbank analysts said prices could turn positive later on
Wednesday following the prior session's 2015 high of $63.
"Yesterday’s price response shows that oil prices still want to
climb," senior oil and commodities analyst Carsten Fritsch said.
"Brent ... is profiting from the renewed shift in focus towards
supply risks."
Egyptian President Abdel Fattah al-Sisi called on Tuesday for a
United Nations resolution mandating an international coalition to
intervene in Libya against Islamic State militants.
Libya's oil exports have collapsed to less than 200,000 barrels per
day (bpd), down from 1.6 million bpd before the 2011 civil war, as
violence in the country has shut all major ports.
(Additional reporting by Henning Gloystein in Singapore; Editing by
Dale Hudson)
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