Oil Up as U.S. Inventories Seen Declining, Eyes on Obama Offshore Drilling Proposal


Oil is on the rise in early morning trade Wednesday, on expectations that crude inventories are falling amid a steady economic recovery.

The American Petroleum Institute reported late afternoon Tuesday that weekly gasoline inventories fell 960,000 barrels to 223.2 million. Meanwhile, the Department of Energy will be releasing its latest weekly data at 1030 ET, and analysts expect gasoline inventories to have fallen by 1.85 million barrels from 224.6 million the week before, according to Bloomberg News.

At 0750 ET, Brent crude is up 0.8% at $81.92 a barrel, while light sweet crude is 0.6% higher at $82.87, and natural gas is up 1.9% at $4.05 a million British thermal units.

There is expectation too that the United States will be exploring for oil closer to home in coming years. The White House wants to open offshore areas along the Atlantic coastline, the eastern Gulf of Mexico, and the north coast of Alaska to oil and natural gas drilling, according to the New York Times. If approved, it would end the moratorium on oil exploration along the East Coast from Delaware to Florida. An official announcement by President Obama is expected later in the morning.

In China, oil explorer CNOOC Ltd (883) reported 2009 profits falling below analysts' expectations as oil prices dropped. The Beijing-based group reported net income falling 34% to about $4.3 billion as oil prices in February 2009 fell 77% from their 2008 highs.

As for Danish oil group A.P. Moller-Maersk (MAERSKb), it is buying a 20% stake in an oil exploration license from Devon Energy ( DVN ) as Maersk looks to expand its outreach in Brazil. Maersk now has five licenses offshore of Brazil. Earlier this month, BP plc ( BP ) had paid Devon a total of $7 billion for assets in Brazil as well as the Gulf of Mexico and Azerbaijan.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: BP , DVN

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