Oil prices mixed ahead of US inventory report

AP FILE PHOTO

SINGAPORE—Oil prices were mixed in Asian trade Wednesday as dealers anticipated a further increase in US crude stockpiles, indicating weak demand in the world’s top crude consumer.

New York’s main contract, West Texas Intermediate for January delivery, was down 18 cents at $93.50 in mid-morning trade while Brent North Sea crude for January gained 12 cents to $111.00.

“The focus is currently on the US inventory figures where we are likely to see a further increase,” Ric Spooner, chief market analyst at CMC Markets in Sydney, told AFP.

“There has been a few refinery closures in the US, and supply will remain on the high side even as we enter the winter season,” he said.

Analysts expect the Department of Energy’s weekly report on Wednesday to show an increase of 500,000 barrels in crude inventories for the week ending November 22.

Over the nine previous weeks the inventories grew by 32.8 million barrels to 388.5 million.

A rise in US stockpiles indicates weak demand in the world’s biggest economy and oil consuming nation, putting downward pressure on prices.

Investors are also digesting the implications of the weekend agreement between world powers and Iran, in which the major oil producer will get modest sanctions relief in exchange for curbs on its disputed nuclear program.

“While there is an understanding that there won’t be a significant change in Iran supply, investors also know there is a possibility of a process that could lead towards further relaxation or complete removal of sanctions,” Spooner said.

The Islamic republic has been crippled by a series of UN and US sanctions aimed at bringing an end to its nuclear drive, which the West claims is being used to develop atomic weapons. Iran denies the assertion.