Oil held above $54 a barrel today, supported by news of an unexpected fall in US crude and gasoline stocks, but gains were limited by persistent uncertainty about any economic recovery.
US crude and gasoline inventories fell last week, the American Petroleum Institute said on yesterday, down from analysts expectations by 1 million barrels of oil and nearly 3 million barrels of gasoline.
A second set of inventory data, from the US Energy Information Administration (EIA), comes out on Wednesday at 2.30pm, and could bring more support to prices if it confirms what would be the first draw in crude stocks in nine weeks.
“As far as we're concerned, nothing changed per last week's report," analysts at the Schork Group wrote in the Schork Report.
"The report was bearish. Total US supplies of crude oil and petroleum products rose to the highest level...since at least 1982, as far back as the DOE provides weekly data."
US light crude for June delivery was up 48 cents to $54.32 a barrel by 10.13am, having settled 63 cents lower yesterday.
The market will also look for the results of US government bank stress tests for any signs of an economic recovery that could indicate growth in oil demand.
Equity markets fell after reports that Bank of America needs $34 billion in fresh capital, according to a source familiar with the results of one of those tests.
Most of the 19 US banks being tested intend to hold news conferences on Friday to explain the results of the government's assessments, with about 10 of the 19 banks deemed to need more capital.
Oil has risen from the low $30s hit this winter, driven higher by stronger equity markets, but has failed to settle above $55 a barrel so far this year as the market sees oil fundamentals still weak, with US crude inventories at 19 year highs.
Around 100 million barrels of crude oil and 25 million barrels of products are estimated to be floating at sea on giant tankers as supply outstrips demand.
Reuters