Oil prices were steady Wednesday as traders weighed expectations of rising U.S. crude and gasoline stocks against concerns about oil production cuts following protests in Nigeria.
Light, sweet crude for June delivery fell 10 cents to US$63.07 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore.
The contract gained 71 cents to settle at US$63.17 a barrel Tuesday following news that protests in Nigeria have cut oil production by 170,000 barrels per day.
The market's concerns about the unrest in Nigeria's oil industry were tempered by forecasts that a midweek U.S. petroleum supply snapshot later Wednesday will show domestic fuel inventories rose last week, analysts said.
"There's an expectation that U.S. domestic gasoline stocks will likely increase and crude inventories may also increase due to rising imports," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "These expectations serve to limit the surge in crude oil futures."
Crude stocks were likely to have risen by 500,000 barrels last week, and gasoline stocks were expected to have gained 900,000 barrels, according to a Dow Jones Newswires poll of analysts' expectations ahead of the report.
Distillate stocks, which include heating oil and diesel fuel, were forecast to have increased by 1.2 million barrels last week, the survey showed.
Despite the expected increases in oil supplies, there are lingering concerns about stocks in the U.S. gasoline market. A combination of high demand for gasoline and low supplies has left U.S. gasoline inventories at historically low levels headed into the peak summer driving season.
An unprecedented number of refinery outages this spring have pulled down U.S. gasoline stocks the past three months, and scattered reports of minor refinery outages continue, giving traders further reason to drive prices higher, analysts say .
Unrest in Nigeria, Africa's largest oil exporter and a major supplier to the United States, also continues to support crude futures.
A Royal Dutch Shell PLC spokesman said protesters occupied an oil facility in southern Nigeria Tuesday, and that the company is negotiating with them.
The attack is the latest incident in a series of bombings, kidnappings and protests that have slashed production by nearly 1 million barrels per day in Nigeria, representing around one-third of its total capacity.
In other Nymex trading, heating oil futures lost 0.16 cent to US$1.8886 a gallon (3.8 liters) while natural gas prices fell 2.4 cents to US$7.84 per 1,000 cubic feet.