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Oil prices rise on expectations US crude supplies fell last week

Oil prices rise on expectations US crude supplies fell last week

Oil prices rose Wednesday on new supply concerns amid expectations that data from the U.S. will show a new decline in its oil inventories.
Crude oil supplies in the United States are expected to fall 1.2 million barrels, the sixth straight weekly decline, in a report from the U.S. Energy Department, according to the mean of forecasts by analysts in a Dow Jones Newswires survey.
The drop is expected because of a decline in imports that market watchers blame in part on fog that kept tankers outside the Houston Ship Channel last week.
The report by the department's Energy Information Administration will be released on Thursday this week, a day late due to the Christmas holiday.
Light, sweet crude for February delivery added 26 cents to US$94.39 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract rose 82 cents to settle at US$94.13 a barrel Monday.
Distillate inventories, which include heating oil and diesel fuel, are seen falling by about 600,000 barrels, according to the analysts' average, while gasoline stockpiles are expected to rise by 1.6 million barrels.
Refinery use is seen increasing by 0.6 percentage point to 88.4 percent of capacity.
Many analysts expect oil futures to trade in a narrow range for the duration of the holidays. Crude futures have in recent weeks held generally to a range between US$87 and US$95, leading some analysts to conclude some investors may be poised to make another push for US$100 a barrel in the new year.
But there is little consensus on that theory. Other analysts maintain that oil's rally in recent months was driven more by speculative buying than the underlying fundamentals of supply and demand. Analysts in this school of thought believe oil's true value is closer to US$50 or US$60 a barrel.
Heating oil futures gained 0.13 cent to US$2.596 a gallon (3.8 liters) while gasoline prices rose 0.6 cent to US$2.39 a gallon. Natural gas futures lost 0.5 cent to US$7.02 per 1,000 cubic feet.
In London, February Brent crude rose 65 cents to US$93.35 a barrel on the ICE Futures exchange.