Oil was steady below $70 a barrel today, after falling for a ninth straight session the previous day to an 11-week low on persistent worries over hefty stockpiles and sluggish demand.
Traders will scour the US weekly oil inventory report from the American Petroleum Institute (API) to see if stockpiles continue to rise, and a slew of economic data, including November industrial output figures, for clues on the health of the world's largest economy.
Oil prices fell more than $8 a barrel from December 1st to December 14th in the longest price slide since July 2001, as rising inventories in the United States cast doubts over the pace of demand recovery in the world's top energy consumer.
Stocks at Cushing, Oklahoma, the delivery point for NYMEX WTI crude futures, have swelled by 7.8 million barrels in the last six weeks to 33.4 million barrels, putting pressure on WTI for near-term delivery as concerns grew over an oil glut in the US Midwest.
The US Federal Reserve's monetary policy decision, to be announced tomorrow after a two-day meeting, will also be closely watched. Interest rates are expected to stay unchanged at near zero, but the tone of any comments made will be analysed for clues as to when the Fed might start tightening policy.
Crude for January delivery rose 24 cents to $69.75 a barrel by 06.30am Irish time, off a morning high of $69.91. Oil had settled down 36 cents at $69.51 yesterday, the lowest settlement level since September 29th. London Brent crude was up 26 cents at $72.15.
US heating demand this week may not provide much price support. The National Weather Service estimated that demand for heating oil -- the favoured heating fuel of the Northeast United States -- would be about 1.3 per cent below normal this week.
On the supply side, US crude inventories were expected to have fallen by 2 million barrels last week, according to a preliminary Reuters poll of analysts.
Distillate stocks probably fell 700,000 barrels, while gasoline stocks were seen up by 1.1 million barrels.
The U.S. Energy Information Administration (EIA) will release its own inventory figures tomorrow.
The Organization of the Petroleum Exporting Countries is expected to hold production targets steady at its next meeting on December 22nd. OPEC has been quietly putting more oil on the market since April, as prices rallied from below $33 a barrel last December.
On a brighter note, economic data due later could show that the US economy is on a slow road to recovery.
The Federal Reserve will unveil November industrial production and capacity utilisation data later today. Economists forecast a 0.5 per cent increase in output, up from a 0.1 per cent rise in October, while capacity utilisation is expected to rise to 71.1 per cent from 70.7 per cent in October.
Reuters