NEW YORK, Feb 6 (Reuters) - Oil edged higher on Wednesday as Wall Street equities rebounded from early losses to trade flat, and Brent crude futures premium over West Texas Intermediate crude briefly above $20.00 a barrel due to an unexpected rise in U.S. crude oil inventories.
Oil's gains were modest, and sentiment was dented earlier in the day after Germany denied the euro was overvalued.
"I think what we've got here is a situation once again where crude oil is going to be backed up, because we'll be producing more than we're refining," said Phil Flynn, analyst at Price Futures Group in Chicago, after the release of weekly inventory numbers that showed high levels of U.S. crude.
"At the moment, we continue to follow the financials. The market seems very sensitive to the economic factors and they remain the primary driver," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
The European Central Bank is expected to keep interest rates at a record low of 0.75 percent when it meets on Thursday, but the focus will be on whether policymakers are worried a strong euro could hurt recovery in troubled economies such as Spain.
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