NEW YORK (Dow Jones)--Crude futures are higher Tuesday, with investors
seeking riskier assets, such as oil and equities, but caution remains ahead of
Wednesday's key oil inventory data report.
Light, sweet crude for April delivery recently traded 38 cents, or 0.5%,
higher at $79.08 a barrel on the New York Mercantile Exchange. Brent crude on
the ICE futures exchange traded 59 cents, or 0.8%, higher at $77.48 a barrel.
Oil reversed some of Monday's losses, with support coming from more positive
economic sentiment, said Gene McGillian, analyst with Tradition Energy in
Stamford, Conn. Equity markets were higher, buoyed by merger activity.
The Greek government is expected to announce Wednesday a new austerity
package to cut its huge budget deficit. But concerns about the sovereign debt
level in Europe still linger, reducing some of the confidence in the economic
recovery and prompting investors to remain wary, adding to much of the
volatility seen in the oil market recently.
Prices have been jostled in a range between $77 to $80 a barrel but the
conviction to push oil back above $80 a barrel is lacking, with McGillian
noting that traders are seeking more concrete evidence about whether the pace
of the economic recovery is fast enough to generate fuel demand.
Wednesday's weekly data report from the U.S. Energy Information
Administration is expected to influence trading this week, with analysts
currently expecting an increase in crude and gasoline stocks. Analysts surveyed
by Dow Jones see a 700,000 barrel rise in crude stocks, a 600,000 barrel
increase in gasoline stocks and a 300,000 barrel decline in distillate
inventories, that includes diesel and heating oil. Refinery processing rates
are expected to remain unchanged at 81.2% of capacity.
However, the inventory data could "easily be overshadowed by a series of
economic releases during the last half of the week," wrote Jim Ritterbusch,
president of trading advisory firm Ritterbusch and Associates in Galena, Ill.
The U.S. jobs picture will come into greater focus with Wednesday's ADP
employment report, Thursday's jobless claims and Friday's monthly unemployment
figure, said Ritterbusch.
Meanwhile, Chile may increase its demand for diesel imports following the
earthquake last weekend, analysts said. Chilean state-run oil company Empresa
Nacional del Petroleo, or Enap's, largest refinery could be off-line for at
least a month. The 116,000 barrel a day Refineria Bio Bio suffered structural
damage from the earthquake.
The company's second largest facility, the 104,000 barrel a day Refineria
Aconagua, is expected to restart operations later this week, once electrical
power is restored.
Front-month April reformulated gasoline blendstock, or RBOB, recently traded
2.08 cents, or 0.9%, higher at $2.1764 a gallon. April heating oil recently
traded 1.23 cents, or 0.6%, higher at $2.0358 a gallon.