Oil prices held steady on Wednesday, but were underpinned by lost Nigerian supplies following an oil pipeline explosion and expectations US data will show crude stocks fell for the first time in three weeks.
US February light crude was down three cents at $58.06 a barrel, while London Brent crude edged 4 cents down to $56.13.
The US January contract rose 64 cents before expiring on Tuesday after Nigerian authorities said unidentified gunmen were suspected to have used dynamite to blow up a major pipeline, cutting output from the world's eighth-largest exporter by 7 percent.
"The Nigerian incident is a clear sign to buy. There had not been much similar market-moving news for a while and it's easier to move prices now because volumes and liquidity are low due to the holiday period," said Naohiro Niimura, vice president of Mizuho Corporate Bank's derivatives business unit.
Royal Dutch Shell, which operates the pipeline, said it had closed two oil fields and "deferred" 170,000 barrels per day (bpd) of production in the southern Niger Delta, which pumps almost all of the Opec member's 2.4 million bpd production.
Oil prices were also supported by expectations US crude and heating fuel stocks fell last week. US government data due later on Wednesday is expected to show a crude draw of 1.0 million barrels for the week ended December 16 due to lower imports and higher refinery runs, a Reuters poll shows.
"Imports will be the key swing variable in this week's balance," said J.P. Morgan in a report. "We would be very surprised to see another very robust imports week." However, crude stocks in the world's biggest energy consumer still appear comfortable at around 13 percent above last year's levels.
Analysts also predicted distillate fuels, including heating oil, dropped by 400,000 barrels, but forecasts for warmer-than-usual weather for the first quarter next year have eased worries over heating fuel stocks and weighed on prices.
US heating oil demand is expected to be near normal this week as a cold spell eases, while total demand for all heating fuels is forecast to be less than 3 percent below normal, the National Weather Service said this week.
It has predicted much of the country will experience warmer-than-normal temperatures from January to March.
Oil prices have pulled back from a record above $70 in August after emergency stocks were released globally to offset lost US production in the wake of devastating hurricanes and as traders discounted the threat of demand spiking from a freezing winter.
Up to 5 percent of US crude and natural gas production in the Gulf of Mexico may never resume production because of hurricane damage to platforms that will not be repaired, the US Minerals Management Service told Reuters on Tuesday.
Comments
Comments are closed.