Oil Prices Hover Near $62 a Barrel
Tuesday February 27, 12:00 pm ET
Oil Prices Hover Near $62 a Barrel on Expectations That U.S. Inventories Will Decline
NEW YORK (AP) -- Oil prices rose Tuesday on expectations that U.S. petroleum product inventories declined last week, erasing earlier losses spurred by concerns about China's demand.
Light, sweet crude for April delivery rose 51 cents to $61.90 in midday trading on the New York Mercantile Exchange. Earlier in the session, they had dropped more than $1 per barrel to as low as $60.06.
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Alaron Trading Corp.'s Phil Flynn attributed the early decline to what he called the "Shanghai shakeup." Chinese stocks dropped nearly 9 percent on Tuesday on speculation that China's government may take steps to slow its rapidly expanding growth by hiking interest rates or taking other steps to reduce money available for borrowing.
That stoked memories of the Asian financial crisis in the late '90s, Flynn said. But traders later "realized that the fears were probably a little overdone."
Brent crude for April rose 59 cents to $61.92 a barrel Tuesday on the ICE Futures exchange.
Traders are expecting declines in gasoline and distillate stockpiles when the U.S. Energy Information Administration reports inventory figures Wednesday. Also helping to buoy prices have been tensions between Western powers and Iran, OPEC's No. 2 supplier, and snowy weather in the U.S. Northeast, the country's largest heating oil market.
Distillate inventories, which include heating oil and diesel fuel, are likely to fall by 2.6 million barrels in the report by the U.S. Energy Department, according to a Dow Jones Newswires survey of analysts. Gasoline stockpiles are seen declining by 1.6 million barrels while crude oil inventories are expected to rise by 1.2 million barrels.
On Monday, the United States, the four other permanent members of the United Nations Security Council and Germany began work on a new U.N. resolution that could impose further sanctions on Iran over its nuclear program after Tehran rejected U.N. demands it stop enriching uranium.
Heating oil demand was expected to rise with a winter storm that pounded the U.S. Midwest on Monday with as much as two feet of snow. The storm also dumped more than a foot of snow on some areas of the Northeast.
Heating oil futures rose 2.44 cents to $1.7806 a gallon on the Nymex, while natural gas slipped by 6.8 cents to $7.635 per 1,000 cubic feet. Gasoline futures rose 2.69 cents to $1.8046 per gallon.
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