By Eric Yep
Crude-oil futures rebounded in Asian trade Tuesday after the
previous day's drop as the oil market continues to see-saw amid a
rebalancing of underlying oil supply and demand, particularly in
the U.S.
On the New York Mercantile Exchange, light, sweet crude futures
for delivery in April traded at $49.93 a barrel at 0338 GMT, up
$0.34 in the Globex electronic session.
Brent crude for April delivery on London's ICE Futures exchange
rose $0.81 to $60.35 a barrel.
U.S. oil prices found some support after industry data provider
Genscape Inc. said oil inventories in the Nymex delivery point of
Cushing, Okla., grew by 1.39 million barrels last week.
Other indicators also show that investors have entered the
market at low oil price levels, betting that prices have hit
bottom.
Overall net long positions in Nymex West Texas Intermediate
crude have risen from a low of 198,427 contracts on Nov. 1 to
473,232 contracts as of Feb. 24 as per Commodity Futures Trading
Commission data, analyst Tim Evans at Citi Futures said.
He said the United States Oil Fund, an exchange-traded fund
based on Nymex West Texas Intermediate crude, has had an influx of
more than $1.7 billion since December that took its holdings to the
top of a five-year range.
Mr. Evans said U.S. oil inventories might rise further as
refineries shut for seasonal maintenance, and there was a risk that
speculators and hedge funds may be forced to start liquidating
their positions.
"It does appear that almost half of the global inventory build
has happened in one Oklahoma town," Paul Horsnell, head of oil
research at Standard Chartered, said in a report.
He said Nymex crude is likely to dislocate from Brent crude
prices further, but U.S. oil storage is unlikely to fill to its
maximum capacity and the weakness in Nymex crude won't transmit
significantly to Brent.
Mr. Horsnell said he now expects Brent crude to average $58 a
barrel in the first quarter, down $10 from before, and $76 a barrel
for 2015, $9 lower than previously forecast.
U.S. Secretary of State John Kerry arrived in Geneva on Monday
to meet Iranian officials as negotiators enter another round of
talks over Tehran's nuclear program, even as Israeli Prime Minister
Benjamin Netanyahu strongly opposed an agreement between Tehran and
Washington. Israel is demanding a complete dismantling of Iran's
nuclear program.
Iraq's military, along with Iran's Revolutionary Guard forces
and volunteer fighters, began a campaign Monday to reclaim the
Iraqi city of Tikrit from Islamic State.
Nymex reformulated gasoline blendstock for April--the benchmark
gasoline contract--rose 212 points to $1.9185 a gallon, while April
diesel traded at $1.9011, 138 points higher.
ICE gasoil for March changed hands at $577.75 a metric ton, down
$6.75 from Monday's settlement.
Write to Eric Yep at eric.yep@wsj.com