By Nicole Friedman
NEW YORK--Oil prices wavered Wednesday as investors assessed a
weaker dollar, ongoing negotiations on Iran's nuclear program and
continued growth in U.S. crude supplies.
Light, sweet oil for May delivery recently rose 18 cents, or
0.4%, to $47.78 a barrel on the New York Mercantile Exchange.
Brent, the global benchmark, rose 37 cents, or 0.7%, to $55.48 a
barrel on ICE Futures Europe.
Prices pared earlier losses after weaker-than-expected U.S.
economic data weighed on the dollar. Oil is priced in dollars, so a
weaker dollar makes oil more affordable to buyers using foreign
currencies. Oil prices and the dollar have tracked each other
closely in recent months.
Nuclear talks between Iran and six world powers missed the
deadline for a preliminary agreement Tuesday. But officials
remained hopeful that they could reach an agreement outlining
elements of a final nuclear deal to be reached by June 30.
Oil-market participants are keeping a close watch on the
negotiations because a deal could lead to the lifting of
international sanctions on Iran, paving the way for more Iranian
crude to flood an already oversupplied global market.
"Negotiators continue to believe that enough progress has been
made so that an agreement can and should be reached," analysts at
FBR Capital Markets & Co. said in a note Wednesday. "An
announcement this week remains a significant risk to oil
markets."
Traders are also waiting for weekly inventory data to be
released at 10:30 a.m. EDT Wednesday, which is expected to show
that U.S. crude-oil inventories hit a record high last week.
Stockpiles are at their highest in about 80 years, as production
continues to grow and demand has been muted due to seasonal
refinery maintenance.
Oil investors are showing "lots of focus on domestic crude
inventory levels near term," analysts at investment bank Tudor
Pickering Holt & Co. said in a note Wednesday. "It does feel
like many are in [the] mode of not truly believing supply will move
lower until they see it."
Analysts surveyed by The Wall Street Journal expect the Energy
Information Administration to report that crude stockpiles rose by
4.6 million barrels in the week ended March 27, while gasoline
supplies fell by 900,000 barrels and stocks of distillates,
including heating oil and diesel fuel, declined by 300,000
barrels.
The American Petroleum Institute, an industry group, said late
Tuesday that its own data for the same week showed that crude
inventories rose by 5.2 million barrels in the week, gasoline
supplies fell by 4.1 million barrels and distillate stocks rose by
18,000 barrels.
Adding to the global oversupply, some analysts expect that the
Organization of the Petroleum Exporting Countries increased its
production in March to more than the cartel's quota of 30 million
barrels a day.
OPEC last year decided to keep its output target unchanged, a
move that sent prices plunging.
Oil prices have now fallen for three-consecutive quarters. Nymex
crude lost 10.6% in the January-March quarter, and has fallen by
55% over the last three quarters, while Brent crude lost 3.9% in
the last quarter and has fallen by 51% over the last three
quarters.
Gasoline futures rose by 0.8% to $1.7849 a gallon. Diesel
futures rose 0.1% to $1.7097 a gallon.
Georgi Kantchev contributed to this article
Write to Nicole Friedman at nicole.friedman@wsj.com
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