Oil edged higher towards $72 today as forecasts for a drop in US inventories helped stabilise a volatile market driven by concerns that Europe's debt crisis would cut into energy demand
US crude stockpiles probably fell by 900,000 barrels last week as imports declined, a poll showed yesterday, in their second straight weekly decline.
Finance ministers from the debt-stricken euro zone sought to restore financial markets' confidence yesterday by agreeing how to deploy a vast anti-contagion programme if needed by struggling members.
Efforts to contain the crisis came after the Hungarian government sent mixed signals about the health of its economy, rattling financial markets and sending crude below $70 yesterday for the first time in almost two weeks.
Prices of front-month US crude, down 18 percent from a 19-month high above $87 in early May, on Tuesday gained 11 cents to $71.55, after earlier touching a high of $71.74. ICE Brent crude was unchanged at $72.12.
Crude supplies in top consumer the United States fell for the first time in seven weeks in the week to May 28th, following an almost unbroken stretch of gains going back to late January.
Gasoline stockpiles were forecast up just 100,000 barrels last week, after four straight weeks of drawdowns, including a hefty decline of 2.6 million barrels in the week to May 28th.
The forecast for distillate stocks called for an average increase of 600,000 barrels, following a modest build the week before and two consecutive moderate declines prior to that.
Industry group American Petroleum Institute will publish inventory figures later today , while government statistics from the Energy Information Administration will follow tomorrow.
Reuters