Oil prices edged higher in Asian trading Wednesday ahead of U.S. government oil inventories data expected to show declines in some fuel stocks.
"The crude oil futures market has rebounded above US$58 as traders focus on the expectation that this week's U.S. inventory report will show declines in products inventories, both gasoline and distillates," said Victor Shum of Purvin & Gertz in Singapore.
Light, sweet crude for April delivery gained 23 cents to US$58.16 a barrel in electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore.
The contract dipped by almost a dollar on Tuesday to settle at US$57.93 a barrel following a decline in Wall Street which stirred worries about the U.S. economy and demand for energy.
Brent crude contract for April added 10 cents to US$61.00 a barrel on the ICE Futures exchange in London.
The oil futures market is experiencing a short-term recovery, said Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo. But market participants are taking the sidelines ahead of the U.S. fuel stocks data, he said.
Market analysts expect gasoline inventories to fall by 2.1 million barrels when the U.S. Energy Information Administration reports data for the week ended March 9 later Wednesday, according to a Dow Jones Newswires poll. Crude oil inventories are expected to rise by 1.4 million barrels, while distillate stocks are expected to fall by 1.9 million barrels due to last week's cold weather.
A monthly report released Tuesday by the International Energy Agency has also buoyed prices, Shum said. The report warned that oil stocks in industrialized countries were falling at an usually high rate so far this year and could be the biggest first-quarter decline in crude oil inventories in 10 years.
Shum said the IEA report helped support prices against the impact of falling Asian stock markets Wednesday, which came in the wake of declines in U.S. stocks, reports AP.
A meeting of the Organization of Petroleum Exporting Countries set for Thursday appeared to have minimal sway on prices because of expectations that oil ministers would opt to keep output steady.
In other Nymex trading, heating oil futures rose 1.64 cents to US$1.7066 while natural gas prices added 8 cents to US$6.972 per 1,000 cubic feet.