U.S. oil futures swing near 6-week high ahead of inventory data

Investing.com - U.S. oil futures swung between small gains and losses on Wednesday, amid speculation weekly supply data due later in the day will show the second consecutive drop in U.S. oil inventories.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in January traded at USD98.44 a barrel during European morning trade, down 0.1%. New York-traded oil futures traded in a range between USD98.34 a barrel and USD98.75 a barrel, the highest level since October 28.

The January contract settled 1.2% higher on Tuesday to end at USD98.51 a barrel.

Nymex oil futures were likely to find support at USD97.24 a barrel, the low from December 10 and near-term resistance at USD98.80 a barrel, the high from October 28.

Market players looked ahead to data from the U.S. government on oil and fuel supplies later in the day to gauge the strength of demand from the world’s largest oil consumer.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 7.5 million barrels in the week ended December 6, compared to expectations for a decline of 2.8 million barrels.

The data also showed that gasoline stockpiles increased 6.3 million barrels, blowing past expectations for a gain of 2.1 million barrels.

Wednesday’s government report was expected to show that crude oil stockpiles fell by 2.95 million barrels last week, while gasoline inventories were forecast to increase by 1.8 million barrels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for January delivery inched up 0.1% to trade at USD109.53 a barrel, while the spread between the Brent and U.S. crude contracts narrowed to USD11.09 a barrel.

The gap between the two contracts has narrowed nearly USD8 since November 27 amid prospects for an easing of a supply bottleneck to refiners in Texas from the U.S. storage hub of Cushing, Oklahoma.