NYMEX Oil Softens Ahead of US Crude Inventory Data, According to Reuters

U.S. Oil Prices Dip Amid Expected Rise in Crude Stocks

• U.S. crude stocks anticipated to increase by 1.8 million barrels
• Gaddafi forces regain ground against rebels
• U.S. dollar strengthens on speculation of reduced bond buying by the Federal Reserve
• Upcoming: EIA inventory data at 1430 GMT

SINGAPORE, March 30 (Reuters) – U.S. oil prices edged lower on Wednesday as forecasts for an increase in domestic crude inventories counteracted support from ongoing unrest in Libya and the broader Middle East.

Market Fundamentals

• NYMEX crude for May fell by 27 cents to $104.52 a barrel as of 0001 GMT, reversing some of the previous session’s gains.
• Ahead of the Energy Information Administration’s data release, a Reuters survey of analysts predicted that U.S. crude stocks would rise by 1.8 million barrels, with gasoline inventories decreasing by 1.9 million and distillate stocks down by 600,000 barrels.
• The American Petroleum Institute reported that U.S. crude inventories rose by a larger-than-expected 5.7 million barrels last week.
• Muammar Gaddafi’s well-armed forces successfully pushed back the rapid advance of rebels as global powers convened in London to exert pressure on the Libyan leader to resign.
• In Syria, President Bashar al-Assad attempted to quell dissent by mobilizing large numbers of people in mass rallies across the nation in response to pro-democracy protests.
• Saudi Arabia’s announcement of plans to expand its drilling rig count by 28 percent indicates a push to achieve a claimed capacity of 12.5 million barrels per day.

Market News

• The U.S. dollar increased in value amid speculation that the Federal Reserve might reduce its bond-buying program.
• U.S. consumer sentiment soured in March due to rising energy prices raising concerns about inflation, potentially impacting economic growth.
• U.S. home prices declined for the seventh consecutive month in January, although they remained above the post-housing bust low recorded in April 2009.
• Greece and Portugal faced additional challenges as Standard & Poor’s downgraded their credit ratings over potential risks to bondholders, leading to a significant spike in borrowing costs.

Upcoming Data/Events (GMT)

• 0300: Japan PAJ weekly oil inventory data (Mar 26)
• 0900: Eurozone business climate (Mar 2011)
• 0900: Eurozone economic sentiment (Mar 2011)
• 1430: U.S. EIA petroleum stocks (Weekly)
• 2301: South Korea industrial output (y/y, Pre-Feb 2011)
• 2315: Japan manufacturing PMI (Mar 2011)

(Reporting by Randy Fabi; Editing by Clarence Fernandez)