Oil ticks higher, market eyes U.S. State of the Union address

By Colin Packham

SYDNEY (Reuters) – Oil prices edged higher for the first time in three sessions on Wednesday, although concerns over the outlook for the global economy capped gains.

U.S. West Texas Intermediate (WTI) crude futures were at $53.74 per barrel at 0153 GMT, up 8 cents from their last settlement. They closed down 1.7 percent on Tuesday.

International futures were at $62.05 per barrel, up 7 cents, after closing down 0.8 percent in the previous session.

Global economic worries have weighed on market sentiment in recent days, offsetting support from signs that global supplies are tightening.

With a nervous market, traders are focused on the U.S. State of the Union address by President Donald Trump.

“Anything out of the State of the Union that hints at the U.S.-China deal not working out, or more anti-trade rhetoric would be a negative for energy prices as demand would be lower if global growth keeps being downgraded,” said Alfonso Esparza senior market analyst, OANDA.

U.S. sanctions on Venezuela have been viewed as supportive for prices by helping tighten global supplies. A flotilla loaded with Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest U.S. sanctions on Venezuela and others whose buyers are weighing who to pay.

The Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to production cuts effective from last month to beat back supply growth.

However, stocks rose last week even as refineries boosted output, while gasoline and distillate stocks increased, data from industry group the American Petroleum Institute showed on Tuesday.

Crude inventories rose by 2.5 million barrels in the week ended Feb. 1 to 448.2 million, compared with analysts’ expectations for an increase of 2.2 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 889,000 barrels, API said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.