04 June 2014, News Wires – Brent crude held near $109 a barrel on Wednesday, as investors eyed US oil inventory data and looked to euro zone policies they hope could spur growth and boost the region’s energy demand.
The European Central Bank will meet on Thursday to discuss a batch of measures aimed at stimulating the economy after inflation in the region dropped to record lows in May.
July Brent crude was at $108.89 a barrel, up 7 cents, early on Wednesday, after settling up 1 cent the previous day. US crude, or West Texas Intermediate (WTI), for July delivery gained 11 cents to $102.77 a barrel.
“At the moment, we’re factoring in a little contribution to global demand for oil from Europe,” said Michael McCarthy, chief strategist at CMC Markets in Sydney.
“Technically we’re in no man’s land for both Brent and West Texas, about mid-way between support and resistance so there’s not a lot to guide us ahead of the ECB decision.”
Oil prices have stabilised this week after slipping 1-1.5% in the last week of May as traders booked profits on an expected rise in Opec supply to the highest in three months in May.
“Increased Opec supply across the past month may see WTI narrow its discount to Brent to a touch under $6 a barrel in the next month or two,” ANZ analysts said in a note.
Investors were waiting for government data on US oil inventories due later on Wednesday, after industry statistics showed a bigger-than-expected fall in crude stockpiles.
Crude inventories fell 1.4 million barrels in the week to 30 May to 382.5 million barrels, data from industry group the American Petroleum Institute showed, compared with analyst expectations for a decrease of 300,000 barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub fell 300,000 barrels, the API said.
Simmering tensions between Russia and Western powers over Ukraine and the political turmoil in Libya that has severely curbed the Opec member’s crude production have been underpinning oil prices.
US President Barack Obama unveiled plans to spend up to $1 billion to beef up military support for eastern European members of the NATO alliance while fighting raged in eastern Ukraine for a second day.
In Libya, the eastern Hariga oil port remained closed on Tuesday as protesting security guards have not been paid, state-oil company AGOCO said.
“There are a lot of impediments to any return to full production in Libya,” McCarthy said.
“It’s not just the disruption to operations, but also issues around control of ports. These problems are a part of a larger political issue in Libya and a resolution appears to be a long way away.”