By Gurdeep Singh
SINGAPORE (MarketWatch) -- Crude oil futures traded sideways in Asia hours Wednesday amid mixed regional equities as the market awaited release of weekly U.S. inventories data for signs on demand in the world's largest energy consumer.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $81.52 a barrel at 0615 GMT, up 3 cents in the Globex electronic session. April Brent crude on London's ICE Futures exchange rose 10 cents to $80.01 a barrel.
Crude was weighed down this morning by the American Petroleum Institute last night, which reported a huge 6.5-million-barrel increase in crude oil stocks, while analysts expected a build of 1.7 million barrels.
But prices moved up after China reported a strong growth in February crude oil imports number, signaling demand remains robust despite concerns of a slowdown due to tighter monetary policy in the country.
"That has some influence, but the market is basically waiting for the Department of Energy inventories data," said Ryuichi Sato at Mizuho Securities.
Analysts surveyed by Dow Jones Newswires forecast the DOE report will show crude oil stocks rose 1.7 million barrels last week while gasoline inventories rose by 100,000 barrels.
Distillate stocks are expected to have fallen by 700,000 barrels. Refinery utilization rates are expected to have risen 0.1 percentage point to 82% of capacity.
The API also reported gasoline stocks fell 3.2 million barrels and distillate stocks, including diesel and heating oil, fell 2.8 million barrels while refinery utilization declined to 80.9%.
The heavy crude build may be counterbalanced if the DOE report also shows a higher-than-expected fall in product inventories, as the market has been more keen to pick and react to bullish news factors in recent weeks, analysts said.
"Although we look for some supportive gasoline numbers, our expected 1-million-barrel gasoline stock draw per the EIA won't do much to alter current bearish gasoline balances," said Jim Ritterbusch at Ritterbusch and Associates.
"We still believe that the independent gasoline strength of recent weeks has been largely a seasonal play that has little to do with shifts in the fundamentals."
The direction of the equities market and the dollar will continue to play a key role in determining crude's movement, Sato said. "As of now the market doesn't have any reason to go up or down."
"All factors considered, we are going to maintain a bullish trading posture for now, keeping open the possibility of a further crude price advance toward the $84 area," said Ritterbusch.
Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose 74 points to $2.2677 a gallon, while April heating oil traded at $2.0920, 22 points higher.
ICE gasoil for March changed hands at $652 a metric ton, up $1.75 from yesterday's settlement.
