Oil prices higher as investors look to U.s. inventory data 

Oil futures climbed in early Asian trade on Wednesday, pushing higher as traders continue to weigh the prospect of a supply deal by the Organization of the Petroleum Exporting Countries and look ahead to U.S. oil inventory data.

Light, sweet crude for November delivery CLX6, +1.44%  rose 46 cents, or 0.9%, to $49.15 a barrel in the Globex electronic session. Brent crude LCOZ6, +1.45%  gained 43 cents, or 0.8%, to $51.30.

Prices have risen sharply in the last week in the wake of an agreement to lock in a production cut by members of OPEC. While the cartel has lost much of its clout in the oil market as shale oil output in the U.S. has surged, many analysts still view a cut as offering a meaningful floor for prices.

“Until last week, the market was operating under an assumption that OPEC had effectively ceased to be,” analysts at Citigroup wrote in a note to clients. “Last week, it showed signs of life.”

The analysts said the deal “is not a game-changer, in our view, given the uncertainties and skepticism around any cuts to production,” but they said it raises the floor under the per-barrel trading range from “the low $40s … to the mid-$40s.”

OPEC reached a tentative agreement in Algiers last week to cut output to between 32.5 million and 33 million barrels a day. Further details are set to be discussed at OPEC’s official meeting in Vienna next month.

Later Wednesday, traders will shift their attention to an update on U.S. oil inventories from the U.S. Department of Energy.

The American Petroleum Institute, an industry group, said late Tuesday its own inventory survey for last week showed a 7.6-million-barrel decrease in U.S. oil stockpiles. Gasoline inventories rose a 2.9 million barrels, while distillate inventories fell 1.3 million barrels, according to a market participant.

Nymex reformulated gasoline blendstock for November RBX6, +0.51%  — the benchmark gasoline contract — rose 0.14 cent, or 0.1%, to $1.501 a gallon, while November diesel traded at $1.5661, 1.17 cents higher.

ICE gasoil for October changed hands at $457.75 a metric ton, up $1.25 from Tuesday’s settlement.

Source: MarketWatch

---