By Eric Yep
Crude-oil futures were marginally higher in Asian trade
Wednesday after overnight losses while focus shifts to this week's
U.S. inventory data and the European Central Bank's meeting.
On the New York Mercantile Exchange, light, sweet crude futures
for delivery in March traded at $46.94 a barrel at 0435 GMT, up
$0.47 in the Globex electronic session.
Brent crude, the global oil benchmark, for March delivery rose
$0.45 to $48.44 a barrel on London's ICE Futures exchange.
U.S. oil production is being driven higher by the shale boom
that has contributed to much of the current global crude
oversupply, and the subsequent decline in oil prices.
U.S. oil stockpiles are expected to take it up a notch and post
another week of record gains. The American Petroleum Institute will
publish its weekly inventory data later in the day, followed by the
U.S. Energy Department Thursday.
Slower consumption by oil refineries makes further accumulation
of oil stocks quite likely, while a narrow price difference between
U.S. and global oil prices suggests higher imports, analyst Tim
Evans at Citi Futures said.
"With inventories already at 387 million barrels...we see
potential for the total to break last April's 399 million-barrel
record, making a stronger bearish statement," Mr. Evans said in a
report.
Oil markets are looking for signs that spending cuts by oil
companies might help shrink the global oil glut. Earlier Wednesday,
Australia's BHP Billiton Ltd. flagged up to $250 million in
write-downs on its petroleum business and indicated a sharp
reduction in U.S. drilling activity.
The Baker Hughes rig count, a measure of U.S. drilling activity,
was down 74 to 1,676 in the week to Jan. 16, the lowest level in 16
months and below the previous year's level of 1,768, according to
Mizuho Securities.
Meanwhile, the Bank of Japan on Wednesday cut its near-term
inflation outlook due to low oil prices. It also projected oil
prices would rise to about $70 a barrel toward the end of its
forecast period through March 2017, from a "starting point" of $55
a barrel.
"The oil market will remain well oversupplied until oil is
physically removed from the market or there is a material
improvement in global oil demand," BMO Capital Markets said. It
said oil prices would need to move low enough to roughly $40 a
barrel to force producers to shut production.
Nymex reformulated gasoline blendstock for February--the
benchmark gasoline contract--rose 130 points to $1.3258 a gallon,
while February diesel traded at $1.6393, 127 points higher.
ICE gasoil for February changed hands at $524.50 a metric ton,
unchanged from Tuesday's settlement.
Rhiannon Hoyle and Takashi Nakamichi contributed to this
article.
Write to Eric Yep at eric.yep@wsj.com
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