Oil prices eased this morning as traders focused on the approaching end of winter ahead of US inventory data, and took profits from gains driven by the International Energy Agency's forecast for higher 2007 demand.
US crude for March delivery was 13 cents lower at $58.93 a barrel by 8.18am, after climbing $1.25 yesterday. London Brent crude for new front month April was down 25 cents at $58.53.
A cold snap in the United States is expected to have driven down distillate inventories, including heating oil, by 4.2 million barrels last week in government data due later today, but with spring approaching traders are paying attention to rising gasoline stocks.
A Reuters survey of analysts sees gasoline inventories climbing by 1.9 million barrels. Stock levels have risen unabated since October and are 2 per cent above the level this time last year, ahead of peak northern hemisphere summer driving demand.
US crude stocks were forecast to have risen 1.2 million barrels as imports increased, the survey found.
Prices yesterday reversed losses seen at the start of the week, after the International Energy Agency raised its forecast for 2007 oil demand growth to 1.55 million barrels per day or a 1.8 per cent rise, prompted by robust economic expansion in China.
Amid growing demand, supply has also been affected by weaker-than-expected non-OPEC growth in production, that has seen forecasts for the completion of new projects being missed and declining Iraqi production.
Agencies