Oil awaits key US energy reserves data

2011-01-20 09:44

Singapore - Oil was lower in Asian trade on Thursday with investors awaiting the release of a widely watched US government energy inventory report, analysts said.

New York's main contract, light sweet crude for February delivery, dropped 10c to $90.76 a barrel and Brent North Sea crude for March delivery was off 29c at $97.87.

Analysts polled by Dow Jones Newswires expect US crude stocks to have decreased by 900 000 barrels last week while gasoline reserves are forecast to surge 2.3 million barrels.

The report by the US Department of Energy is usually released on Wednesday but was delayed by a day because of a public holiday on Monday.

A bleak snapshot of the US housing market appeared to dampen investor sentiment. The US is the world's biggest oil consumer and sluggish economic data is seen as affecting crude consumption.

"US crude declined as weak housing data fed worries about the economy... Declines on Wall Street also weighed on crude oil prices," analysts from Singapore's Phillip Futures said in a report.

Data released on Wednesday by the Commerce Department showed new housing starts across the United States stood at 587 000 in 2010, up slightly from the year before, but still the second lowest since 1959.

"The question for (traders) is how will economic data scroll out in a $90-plus crude oil environment?" said Mike Fitzpatrick, of the Kilduff Report.