Oil prices rise as investors await latest U.S. supply report
Oil prices edged higher on Wednesday as investors awaited the latest US supply report for clues about demand in the world’s biggest crude consumer.
The US benchmark, West Texas Intermediate for delivery in July, gained 63 cents to $103.29 a barrel.
Brent North Sea crude for July climbed 57 cents compared with Tuesday’s closing level to stand at $109.29 a barrel in midday deals.
The official weekly US stockpiles report Wednesday is expected to show inventories dipped 100,000 barrels on average in the week to May 30, according to a Wall Street Journal survey of 13 analysts.
A decline in US inventories usually indicates healthy demand in the world’s biggest economy, which could in turn support global crude prices.
Ahead of the data, investors were monitoring the situation in Ukraine, where government forces and pro-Russian insurgents have been embroiled in skirmishes for weeks in the east, although fighting has so far not expanded into a full-fledged civil war.
The West has accused Russia of fomenting unrest in its neighbour since the ousting of pro-Kremlin president Viktor Yanukovych in February. Moscow denies the allegation.
Investors are concerned that a full-blown conflict in Ukraine would disrupt supplies and send energy prices soaring. Russia accounts for nearly 40 percent of EU gas imports, with half of that transiting through pipelines in Ukraine.
Analysts say the risk premium associated with the crisis has slightly eased after Russia gave Ukraine a respite of an extra week until June 9 to make payments for gas imports at an increased price set after Yanukovych was ousted.