Oil prices rose in Asian trade Wednesday, gaining back a small portion of losses the last three sessions that were driven by easing supply concerns.
Light, sweet crude for November delivery rose 24 cents to US$79.77 a barrel in Asian electronic trading on the New York Mercantile Exchange by late morning in Singapore.
On Tuesday, the contract fell US$1.42 to settle at US$79.53 a barrel. The drop marked the third consecutive day of decline following eight straight sessions in which oil futures hit new records.
Traders were keeping an eye on three tropical weather systems, one in the southwestern Gulf of Mexico, one entering the Caribbean Sea and one, Tropical Storm Karen, in the central Atlantic. But investors are not convinced any of the three directly threaten critical oil and gas infrastructure in the Gulf.
After floor trading ended in the U.S. Tuesday, the federal Minerals Management Service said all evacuations from an earlier storm threat had ended from the Gulf of Mexico's production platforms and drilling rigs. Almost all of the Gulf's oil and gas production was back on line, the agency said.
At the height of the evacuations over the past weekend, 100 production platforms and 14 drilling rigs had been evacuated and 58 percent of the normal daily oil production and 25 percent of the normal gas production had been interrupted.
The recent three-day decline in prices ignited debate among analysts over whether the move is a correction in a bull market or the beginning of a long-term decline in crude prices.
There was little news affecting oil prices Tuesday as oil prices continued to drop from near US$84 a barrel last week, analysts said.
If anything, the oil-related stories would seem to support higher prices. An opposition group in Nigeria, a major oil producer, has ended a cease-fire and said it will resume attacks on oil installations. Analysts also expect the government to report Wednesday that oil inventories fell last week.
U.S. crude oil stocks are expected to have fallen 2 million barrels, on average, for the fifth-straight week in the week ended Sept. 21, according to a Dow Jones Newswires survey of analysts.
Inventories of distillates, which include heating oil and jet fuel, are forecast to have dropped 1.1 million barrels while gasoline inventories are expected to have gained about 100,000 barrels. Refinery use is expected to have declined 0.7 percentage point to 88.8 percent of capacity.
In London, November Brent crude rose 18 cents to US$77.80 a barrel on the ICE futures exchange.
Nymex heating oil futures rose 0.37 cent to US$2.1850 a gallon (3.8 liters) while gasoline prices rose 0.12 cent to US$2.0391 a gallon. Natural gas futures inched up 0.5 cent to US$6.365 per 1,000 cubic feet.