Oil prices ease before US energy report
LONDON - Global crude oil prices eased on Wednesday in cautious deals before the US government's latest weekly energy report.
Brent North Sea crude for delivery in May dropped 47 cents to $110.22 a barrel nearing midday deals in London.
New York's main contract, West Texas Intermediate (WTI) light sweet crude for May, edged down 43 cents to $96.70 a barrel.
Later on Wednesday, the US government's Department of Energy will publish its report on crude reserves for the week ending March 29.
A pipeline closure in the US has meanwhile sparked fears that inventories could rise, dealers said.
"Uncertainty surrounding the impact of the ruptured pipeline has kept US light sweet crude prices volatile," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.
ExxonMobil's Pegasus pipeline in Arkansas, a 95,000 barrel-a-day line, has been down since an oil spill on Friday.
There are concerns the closure could lead to a build-up of stockpiles at the Cushing, Oklahoma, delivery point as crude cannot be pushed through to refineries. Such a build-up puts a downward pressure on prices.
The weekly DoE report is a key event for the market because the United States is the world's biggest crude consuming nation, followed by number two China.
Market expectations are for crude oil reserves to increase by 1.5 million barrels, according to analysts polled by Dow Jones Newswires.
Gasoline or petrol stocks are seen dropping by 500,000 barrels.
Oil market watchers are tracking the level of gasoline stockpiles ahead of the start of the peak-demand US driving season next month, when many Americans hit the roads for their vacations.
The market is also eyeing a policy meeting on Thursday of the European Central Bank (ECB), which is at the forefront of the fight to tackle the debt crisis in the eurozone, analysts said.
Analysts expect the ECB to hold off from cutting rates or announcing any other policy moves to keep up pressure on governments to solve the crisis in the eurozone.
"Traders have also been a little cautious this week ahead of a key (European) Central Bank meeting and the hugely influential (US) non-farm payrolls (due on Friday)," said a report from IG Markets Singapore.
On Friday, attention will switch to the vital US non-farm payrolls figures that are due for publication, and are widely considered to be a key indicator for the health of the world's biggest economy.