Oil edges down as traders weigh U.S. stock build, OPEC cuts
By Jessica Resnick-Ault
NEW YORK (Reuters) - Oil prices ended less than 1 percent lower on Wednesday after data showed a build in U.S. crude inventories, reinforcing the view that oil prices are range bound, buoyed by expected OPEC production cuts while pressured by U.S. output growth.
U.S. crude futures for March delivery CLc1 settled at $52.75 a barrel, down 43 cents, after earlier dropping to as low as $52.56 per barrel.
Benchmark Brent crude LCOc1 settled down 36 cents a barrel at $55.08.
"Crude oil is in the middle of a trading range that began to unfold in early December," said Walter Zimmerman, chief technical analyst at ICAP. "You have a market with a serious case of indigestion, it swallowed too much speculative length."
Market expectations of output cuts by the Organization of the Petroleum Exporting Countries have provided a floor for prices, while extreme speculative length and looming U.S. production growth provide a ceiling, he said.
The U.S. government's Energy Information Administration (EIA) reported that crude, gasoline and diesel stockpiles rose, confirming a report from the American Petroleum Institute trade group late on Tuesday. [API/S] [EIA/S]
The EIA data, however, showed a substantial build in gasoline stockpiles of 6.8 million barrels, exceeding analyst expectations and figures in the API report.
U.S. gasoline crack spreads, or refining margins RBc1-CLc1, hit a session low of $12.20 a barrel after the data was released, the lowest since Dec. 14. Continued...