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Oil prices show little movement ahead of U.S. inventory report

Oil prices were steady Wednesday as traders awaited the weekly U.S. inventory report, which was expected to show a decline in gasoline stocks and an increase in crude oil supplies.

Light, sweet crude for May delivery fell 2 cents to US$61.87 a barrel in midmorning Asian electronic trading on the New York Mercantile Exchange.

Prices have been volatile the last couple of weeks, gaining nearly US$5 a barrel after Iran detained 15 British sailors and marines, dropping on their release last Thursday, and then sliding almost US$3 on Monday on expectations of oversupply at a key North American delivery point.

Continued worries over Iran's nuclear program and below-normal temperatures in the northeastern and central United States are keeping a floor under prices.

Traders are also looking ahead to the inventory report from the U.S. Energy Department, due later Wednesday.

Analysts surveyed by Dow Jones Newswires expect gasoline inventories to have dropped by an average of 1.3 million barrels last week from the previous week. Analysts are also calling for a 900,000 barrel decline in distillate stockpiles - which include diesel fuel and heating oil - and a build of 1.6 million barrels in crude oil supplies.

Rising tensions with Iran continue to support prices. Iran announced Monday that it has begun enriching uranium on an industrial scale. President Mahmoud Ahmadinejad said the country was now capable of enriching nuclear fuel using 3,000 centrifuges. Some experts said the announced capabilities would fall far short of the material needed to run the plant.

The claim comes days after Iran released 15 British sailors and marines it had held for 13 days for allegedly entering its waters, defusing a potential crisis with the West. Oil prices rose more than US$5 a barrel - hitting six-month highs - after that March 23 detention.

In other Nymex trading Wednesday, natural gas futures rose 6.1 cents to US$7.930 per 1,000 cubic feet, while heating oil futures gained 0.49 cent to US$1.8610 a gallon.

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