Credit: Investing.com -
Investing.com - West Texas Intermediate oil futures inched up on Wednesday, but gains were likely to remain limited amid speculation weekly supply data due later in the session will show U.S. crude inventories rose to the highest level on record last week.
On the New York Mercantile Exchange, crude oil for delivery in April tacked on 10 cents, or 0.2%, to trade at $48.39 a barrel during European morning hours. Prices held in a range between $48.35 and $49.05.
Wednesday's government report was expected to show that U.S. crude oil stockpiles rose by 4.4 million barrels last week, while gasoline stockpiles were forecast to decrease by 1.7 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 404,000 barrels in the week ended March 6, the first drop in two months.
The report also showed that gasoline stockpiles rose by 1.7 million barrels, while distillate stocks increased by 1.7 million barrels.
A day earlier, New York-traded oil prices tumbled $1.71, or 3.42%, to settle at $48.29 a barrel as a firmer U.S. dollar weighed on commodities.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, hit 99.01 on Wednesday, the most since April 2003, and was last at 98.91, up 0.3%.
A stronger dollar makes U.S. commodities more expensive for importers holding other currencies such as yen or euro.
Demand for the dollar continued to be underpinned after last week's stronger-than-forecast nonfarm payrolls report for February solidified expectations for higher interest rates.
The Fed is expected to begin raising interest rates around the middle of this year and investors were looking ahead to next week's policy statement to see if it would drop its reference to being patient before raising rates.
Meanwhile, the euro was at 12-year lows against the greenback, pressured lower by the diverging monetary policy stance between the Federal Reserve and the European Central Bank.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery shed 21 cents, or 0.38%, to trade at $56.18 a barrel, after hitting an intraday low of $55.93, the weakest level since February 11.
On Tuesday, London-traded Brent prices plunged $2.14, or 3.66%, to end at $56.39 a barrel as investors focused on a surplus in global supplies.
Oil prices have fallen sharply in recent months as OPEC resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $7.79 a barrel, compared to $8.10 by close of trade on Tuesday.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
