U.S. crude rose 8 cents to $58.66 a barrel after sliding $1.01 on Monday. London Brent crude was up 24 cents at $59.29.
Unseasonably mild temperatures in the U.S., the world's biggest heating oil market, are expected to leave demand about 16 percent below normal this week, the National Weather Service said.
U.S. heating oil stocks are nearly 7 percent above last year's level, and analysts polled by Reuters see distillate stocks - including heating oil - having fallen only 390,000 barrels last week in inventory data due Wednesday.
"Inventory levels are too high, with heating oil inventories ultra-high. But energy demand should pick up with winter," said Tony Nunan, manager at Mitsubishi Corp.'s risk management unit.
The International Energy Agency said Friday oil stocks in industrialized nations rose 1.15 million barrels per day (bpd) during the third quarter, the biggest rise since 1991.
Crude stocks in the U.S. are seen rising another 750,000 barrels in the week to Nov. 10, despite an agreement by OPEC to cut output 1.2 million bpd from November in an effort by the producers group to stem a 25 percent price slide since mid-July.
A Gulf source familiar with Saudi Arabia's policy told Reuters on Monday the world's top oil exporter will enforce its 380,000-bpd OPEC cut in full until the end of the year.
But refining sources told Reuters the kingdom will ship more to some customers next month in Asia, which takes nearly half its exports.
Since the beginning of October, U.S. and Brent crude have traded at $58 to $62 a barrel, with speculative hedge funds playing a part in keeping prices in this range.
They have sold when the price begins to break higher and bought as it nears the bottom of the six-week range, analysts and traders said.
The latest data from U.S. regulatory body the Commodity Futures Trading Commission showed speculators on the New York Mercantile Exchange cut net crude short positions in the week ended Nov. 7, taking their overall position to around neutral.
"This lack of commitment and a net position which is neutral should partly explain the flat price swings that we currently have," said Olivier Jakob, analyst at Petromatrix.
Oil is down nearly $20 from its mid-July peak of $78.40 and has recently been hovering near the bottom of a range of $57 to $62 that has held since early October.
Post a Comment