OIL FUTURES: Crude Range-bound, Retraces Earlier Losses
By Sarah Kent
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Oil futures retraced earlier losses Wednesday, though the market remained mired in range-trading.
"Brent is stuck in a trading range of $108-$113 a barrel, moving as currencies bob around and news headlines are released," said Christopher Bellew, energy broker at Bache Commodities.
At 0958 GMT, the front-month June Brent contract on London's ICE futures exchange was three cents lower at $112.50 a barrel. The front-month July contract on the New York Mercantile Exchange was trading down 27 cents, or 0.3%, at $99.32 a barrel.
Investors seemed to have dismissed the risks posed by volcanic ash from the Grimsvotn eruption in Iceland and Morgan Stanley and Goldman Sachs' upgrades to their oil price forecasts earlier in the week also seemed to buoy sentiment.
However, a weak euro weighed on prices, preventing the market from moving substantially higher.
Moves of the euro against the dollar are significant for investors in the oil market as oil is denominated in dollars, so a stronger greenback makes the commodity more expensive for holders of other currencies.
At 0958 GMT The euro was at $1.40736 from $1.4100 late Tuesday in New York.
Data from the U.S. Department of Energy, due 1430 GMT, will be closely watched by investors for clues as to the health of oil demand in the world's biggest consumer of the commodity.
Crude oil inventories are expected to fall by 1.2 million barrels, according to a survey of analysts by Dow Jones Newswires. Gasoline stockpiles are seen falling by 100,000 barrels and stocks of distillates, which include heating oil and diesel, are expected to remain unchanged.
Data from the American Petroleum Institute, an industry group, released late Tuesday showed a steep build in gasoline stocks, helping to take the wind out of a brief rally seen in the oil market after Goldman Sachs and Morgan Stanley upped their price forecasts. If the DOE report shows any surprise builds fresh moves lower should be expected.
"Overall, the API wasn't the kind of report that will turn you in an overnight believer of $130-a-barrel oil," said Olivier Jakob, managing director of Swiss consultancy Petromatrix, in a note. "Instead, for today it says to be careful on gasoline length before the DOE weekly report."
At 0958 GMT, the ICE's gasoil contract for June delivery was up $1.50, or 0.2%, at $920.75 a metric ton, while Nymex gasoline for June delivery was 222 points, or 0.7%, lower at $2.9706 a gallon.
-By Sarah Kent, Dow Jones Newswires; 4420-7842-9376; firstname.lastname@example.org