Oil futures drifted lower Wednesday as traders awaited weekly data on U.S. crude inventories.
West Texas Intermediate crude for December delivery
the global benchmark, was off 35 cents, or 0.4%, at $84.43 a barrel on ICE Futures Europe.
Bulls appeared to be taking a breather after crude rallied Tuesday, finding support after the Energy Information Administration’s monthly Short-Term Energy Outlook showed that the oil market would be oversupplied in 2022. That was seen reducing the likelihood the Biden administration would tap the Strategic Petroleum Reserve.
The report “makes it less clear if the Biden administration will still take action to ease prices. However, we would still not rule out an SPR release, particularly if prices stay at these stubbornly high levels,” said Warren Patterson, head of commodities strategy at ING, in a note.
Weekly EIA data on crude inventories was expected to be in the spotlight Wednesday.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 2.5 million barrels for the week ended Nov. 5, according to several sources. The API also showed inventory declines of 4.5 million barrels for gasoline and 3.3 million barrels for distillate stockpiles, two sources told MarketWatch.
Crude stocks at Cushing, Oklahoma, the delivery hub for Nymex futures, meanwhile, rose by 234,000 barrels for the week, sources said.
On average, the EIA is expected to show crude inventories up by 1 million barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also calls for a supply decline of 1.6 million barrels for gasoline, while distillate stockpiles are expected to show no change for the week.