Oil prices gained Wednesday in Asian trading ahead of the release of U.S. fuel inventory data expected to show a drop in domestic gasoline stocks.
Light, sweet crude for June delivery added 25 cents to US$64.65 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore. The contract fell US$1.31 to US$64.40 a barrel Tuesday.
Stockpiles of gasoline were expected to decline in the U.S. Energy Department's midweek snapshot of the country's petroleum supply for the week ended April 27 to be released later Wednesday, according to a Dow Jones Newswires survey of 10 energy analysts.
"The market is focused on whether there's going to be enough gasoline for the Northern summer driving season. It's a genuine question," said Tobin Gorey, a commodity strategist with Commonwealth Bank of Australia in Sydney.
U.S. gasoline stocks typically grow in the months of April and May but have been depressed this year by strong demand, low imports and refinery outages.
"The question now is whether there will be time for refiners to catch up to be ahead of demand rather than spend the entire summer trying to catch up," Gorey said.
But analysts also predicted the U.S. Energy Information Administration report to show refinery utilization increased by 0.8 of a percentage point. After a string of recent refinery outages, several refineries were restarting shuttered units, including Gary-Williams Energy Corp.'s 55,000 barrel-a-day Wynnewood, Oklahoma, refinery and Valero Energy Corp.'s Texas City, Texas, plant.
The report is also expected to show crude stocks were forecast to rise by 1.15 million barrels, while distillate stocks, which include heating oil and diesel fuel, were likely to grow by 210,000 barrels on average.
Crude futures were also supported by news Tuesday that six foreign oil workers were kidnapped and a Nigerian sailor was killed when dynamite-wielding militants attacked an oil vessel in Nigeria's oil-rich south.
A Nigerian spokesman for San Francisco-based Chevron said the company had shut down an oil station that supplies the ship because of the attack, decreasing production by 15,000 barrels a day.
Stepped-up violence since early 2006 in the unruly southern region where crude is pumped has cut Nigeria's daily production by about one quarter, helping send global crude prices higher. Nigeria, Africa's largest oil producer and a main crude supplier to the United States, is both one of Africa's richest countries and one of its most problem-laden, with vast oil reserves but also rampant corruption and violent crime.
Heating oil futures dropped 0.61 cent to US$1.889 a gallon (3.8 liters) while natural gas prices added 0.5 cent to US$7.723 per 1,000 cubic feet.
"We should use shock therapy to sober up the Americans. In this case, the Americans will speak about the need to resume dialogue. There is no other option"
The United States is concerned about the current crisis in the relations with Russia and suggests returning to reasonable policies to avoid a nuclear war