Oil prices edge higher ahead of US stockpiles report
Oil prices edged higher in Asia Wednesday as dealers sat on the sidelines ahead of an upcoming US stockpiles report, while a record-breaking North American cold snap provided strong support.
New York's main contract, West Texas Intermediate (WTI) for February delivery, was up 29 cents at $93.96 in mid-morning trade while Brent North Sea crude for February rose eight cents at $107.43.
"The market has just pulled a bit at this stage after a few days of steep decline for WTI," Ric Spooner, chief market analyst at CMC Markets in Sydney, told AFP.
"I think investors have gone into the wait-and-see mode prior to the release of the inventory data," he said.
Estimates from 11 analysts surveyed by the Wall Street Journal showed US stockpiles are projected to have fallen 600,000 barrels on average in the week to January 3.
The US Energy Information Administration will release the official stockpiles report later Wednesday.
US stockpile levels are keenly monitored by investors as it is an indicator of demand in the world's largest largest economy and the biggest oil consuming nation.
Prices were also underpinned by a boost in demand for heating fuel following a record-breaking cold snap in North America.
All of Canada and all the US states bar tropical Hawaii recorded temperatures below freezing on Tuesday, even usually sunny and warm Florida and California.
The drastic drop in temperatures has been attributed to a shift in a weather pattern known as the "polar vortex", which has coincided with wind chill warnings across the eastern seaboard.
Spooner said a prolonged spell of bad weather could put pressure on prices "because the whole economy loses production due to disrupted services".