Crude oil futures prices were slightly higher Wednesday, awaiting direction from U.S. oil inventory data and the outcome of Federal Reserve's policy board meeting.
Gasoline futures mounted further gains after three refineries in Texas City, which account for about 4% of U.S. refining capacity, suffered power outages late Monday. BP said all units remain shut and it doesn't have reliable power supply for its Texas City refinery, one of the largest in the nation, after a fire and outage Monday night, while Marathon Oil and Valero said they had begun restarting units at their plants.
"The crude market is being led up by products," said Andy Lipow. president of Lipow Oil Associates.
Traders also are awaiting the results of the Federal Open Market Committee meeting and a scheduled press conference by Federal Reserve Board Chairman Ben Bernanke late in the trading day. The market is awaiting signs of when the Fed may shift away from its policy of keeping interest rates at extremely low levels in an attempt to stimulate the economy. Critics say Fed policy has kept the dollar weak and helped sharpen the surge in oil and other commodities.
"We do expect strong suggestions of a continued loose monetary policy through the summer," said Jim Ritterbusch of Ritterbusch and Associates. "We look for dollar weakening to remain as an import price prop" for crude.
Light, sweet crude for June delivery on the New York Mercantile Exchange was up 15 cents at $112.36 a barrel. ICE North Sea Brent crude was 51 cents higher, at $124.65 a barrel.
U.S. inventory data released late Tuesday by the American Petroleum Institute showed larger gains in crude oil and distillate (diesel/heating oil) stockpiles than expected, along with a deeper drop in gasoline stocks. API data showed a 4.911-million-barrel rise in crude stocks, a 1.525-million-barrel rise in distillates and a 2.088 million-barrel drop in gasoline stocks.
Traders will be closely watching the Energy Information Administration data, due at 10:30 a.m. ET, for guidance.
Analysts surveyed by Dow Jones Newswires expect the data to show crude oil stocks rose by 900,000 barrels in the week ended April 22, while gasoline stocks dropped 1.1 million barrels and distillates rose 200,000 barrels. Refineries were expected to post a 0.8 percentage point rise in operations relative to capacity.
U.S. gasoline inventories have dropped about 14%, in the past nine weeks and concerns are growing about tightening inventories ahead of the peak summer demand season. At the same, retail gasoline prices are inching up toward $4 a gallon on a national average, a price where analysts said demand could be curtailed. Prices last hit that level in July 2008, when demand fell 5% year-on-year.
Nymex May reformulated gasoline blendstock futures, up 12.4 cents in the past four days, were 2.19 cents higher, at $3.3791 a gallon. May heating oil futures were 1.59 cents higher, at $3.2270 a galllon.