U.S. oil edges higher ahead of weekly supply data

Investing.com - West Texas Intermediate oil rose on Wednesday, as investors awaited the release of weekly supply data out of the U.S. later in the session to gauge the strength of oil demand from the world’s largest consumer.

On the New York Mercantile Exchange, crude oil for delivery in August inched up 0.09%, or 10 cents, to trade at $105.44 a barrel during European morning hours. Nymex prices held in a range between $105.20 and 105.50 a barrel.

U.S. oil futures fell to $104.60 on Tuesday, the lowest since June 12, before trimming losses to settle at $105.34, down 0.03%, or 3 cents.

New York-traded oil futures were likely to find support at $104.60 a barrel, the low from July 1 and resistance at $106.81 a barrel, the high from June 26.

Wednesday’s government report was expected to show that U.S. crude oil stockpiles fell by 2.3 million barrels last week, while gasoline stockpiles were forecast to increase by 0.4 million barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell 876,000 barrels in the week ended June 27. The report also showed that gasoline stockpiles decreased by 407,000 barrels, while distillate stocks rose by 4.4 million barrels.

Investors also looked ahead to key U.S. economic data later in the day for further indications on the strength of the economy and the future course of monetary policy.

The U.S. is to release the ADP report on private sector job creation in June later in the session. The report comes ahead of Thursday's monthly government jobs report that is expected to show a gain of 212,000 new jobs in June.

The data will be released one day earlier than usual due to the July 4 U.S. Independence Day holiday on Friday.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery tacked on 0.03%, or 4 cents, to trade at $112.33 a barrel.

London-traded Brent futures fell to a three-week low of $111.85 on Tuesday as investors continued to unwind positions that had priced in the possibility of major supply disruptions stemming from the bloody Iraqi insurgency.

Futures rallied to nine-month highs amid fears that an insurgency in northern Iraq would spread to the oil-rich south and disrupt the nation's oil production.

However, prices have been under pressure in recent sessions amid indications Iraqi oil exports from the southern part of the country remained insulated from the sectarian violence that has swept the north in recent weeks.

Iraq produced approximately 3 million barrels a day of oil last month, making it OPEC’s second-biggest oil producer behind Saudi Arabia.

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