Crude-oil futures were steady in Asian trading Tuesday with the
market still lacking any clear direction after last week's
rally.
On the New York Mercantile Exchange, light, sweet crude futures
for delivery in February traded at $93.14 a barrel at 0625
GMT--down $0.05 in the Globex electronic session. February Brent
crude on London's ICE Futures exchange fell $0.05 to $111.35 a
barrel.
Nymex crude climbed last week to its highest level since
mid-October in a relief rally as U.S. lawmakers reached a deal on
the fiscal cliff.
The benchmark has also narrowed its discount to Brent in recent
days on news that the Seaway Pipeline will begin operations by the
end of this week and allow surging U.S. crude production to flow
from the oil-transit hub of Cushing, Okla., to Gulf Coast
refineries. The gap, which reached its narrowest since September on
Monday, was unchanged in Asian trading Tuesday.
Money managers raised their net long positions in both Nymex and
Brent crude oil futures by 11% in the final week of the year
suggesting optimism prices will rise.
Since then, broader investor sentiment has turned more bearish
with Asian shares lower on doubts U.S. lawmakers will reach a deal
to raise the country's debt ceiling.
"Our fundamental view on the oil market remains decidedly
bearish," analysts at Raymond James said in a note.
They forecast global oversupply this year to reach close to 2
million barrels a day--which means "prices have to fall low enough
to sharply curtail U.S. drilling activity and also convince Saudi
Arabia to cut production."
Saudi Arabia--the world's biggest oil exporter--has kept
production up in recent months in a bid to keep prices from
spiking.
"Geopolitical concerns and overall economic optimism can, of
course, prop up prices temporarily--as has been the case
lately--but if inventories become as full as we think, a major oil
correction becomes unavoidable," they said.
U.S. weekly oil data are expected to show crude oil stockpiles
rose 1.6 million barrels last week, according to analysts surveyed
by Dow Jones Newswires. The closely watched government survey from
the Energy Information Administration is due to be released at 1530
GMT Wednesday.
Nymex reformulated gasoline blendstock for February--the
benchmark gasoline contract--rose 86 points to $2.7860 a gallon
while February heating oil traded at $3.0352, 31 points higher.
ICE gasoil for January changed hands at $937.75 a metric
ton--down $0.75 from Monday's settlement.
Write to Jacob Gronholt-Pedersen at
jacob.pedersen@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires