Oil falls near $52 ahead of U.S .inventory data

Oil edged lower near $52 a barrel on Thursday ahead of U.S. weekly inventory data expected to show a slight increase in domestic crude and distillate stocks.

U.S. crude futures eased 33 cents to $51.91 by 1152 GMT, retracing gains of more than a dollar the previous session. Prices on Wednesday briefly touched a 20-month low of $50.28 before rebounding.

London Brent fell 20 cents to $52.58 a barrel.

Analysts polled by Reuters forecast imports to push up U.S. weekly crude stocks by 100,000 barrels last week, the first rise in eight weeks.

Distillate stocks were expected to have risen 1.9 million barrels, with gasoline seen rising 2.2 million barrels. The data will be released on Thursday, a day later than usual, due to a U.S. holiday on Monday.

Prices found some support from a cold snap in the United States, which has triggered the long-awaited winter demand for heating fuel.

“Current U.S. weather forecasts should also provide some staying power to yesterday’s higher move,” said Man Financial.

Following an arctic blast in the U.S. Northeast — home to about 80 percent of the nation’s heating fuel consumption — heating oil demand was forecast to rise above average for most of the week, private forecaster DTN Meteorlogix said.

The government’s
National Weather Service said temperatures could average below normal along the eastern seaboard for another two weeks, though some warming could reach the Midwest and West next week.

However buying might be short-lived as the icy weather has come late and oil supplies were already ample, analysts said.

“Stacked up against what has been a warm northern winter to date, the impact on comfortable inventories is going to be minor. The timing as much as anything matters,” Tobin Gorey, commodity strategist from Commonwealth Bank of Australia, said in a report.

Prices eased from the day’s highs after Saudi Arabia’s oil minister said on Thursday the kingdom was committed to investment to boost oil output capacity to meet growing demand and will keep its goal of 1.5-2.0 million barrels per day (bpd) of spare production capacity.

The International Energy Agency said oil producers outside
OPEC will pump less oil than expected this year, increasing the burden on OPEC just as the exporter group is trimming supply.

In its latest monthly report, the adviser to 26 industrialized countries forecast oil supply from non-OPEC sources will rise by 1.4 million bpd this year, less than the 1.7 million bpd expected last month.