Oil ends up 3 percent on cold weather but glut worry persists
By Barani Krishnan and Dmitry Zhdannikov
NEW YORK/LONDON (Reuters) - Oil prices jumped 3 percent on Tuesday, recouping the previous day's loss as colder weather encouraged buyers, but traders said prices remained under pressure due to slowing global demand and abundant supplies from OPEC members.
After settlement, industry group the American Petroleum Institute (API) reported a weekly rise of almost 3 million barrels in U.S. crude inventories, not the draw expected by many analysts and traders. [API/S]
Global oil benchmark Brent and U.S. crude's West Texas Intermediate (WTI) futures settled up more than $1 a barrel, after weather forecasts showed the United States may get some cold winter temperatures following an unusually balmy autumn.
Oil prices gave much of the day's gains after the API report.
Brent LCOc1 finished up $1.17, or 3.2 percent, at $37.79 a barrel. About 40 minutes after the API numbers, Brent was up only 76 cents at $37.38
WTI closed up $1.06, or 2.9 percent, at $37.87. After the API numbers, WTI was up only 52 cents, at $37.33.
Analysts polled by Reuters poll had forecast that U.S. crude stockpiles fell 2.5 million barrels last week. The U.S. government's Energy Information Administration will issue official inventory numbers on Wednesday. [EIA/S]
U.S. heating oil HOc1, also known as Ultra Light Sulfur Diesel (ULSD), partly fed Tuesday's gains in crude, rising nearly 4 percent to above $1.13 a gallon. ULSD and natural gas, another heating fuel, have rallied this week on cold weather expectations. [NGA/] Continued...