* U.S. crude inventories seen rising in weekly EIA data
* Market awaits Feb ADP jobs report, non-farm payrolls data
* Hopes of wider OPEC supply cut at next meeting offer
boost
By Jennifer Tan
SINGAPORE, March 4 (Reuters) - Oil edged down towards $41
on Wednesday, after surging nearly 4 percent overnight in
anticipation that producer group OPEC would cut supply further
at its next meeting.
Weekly inventory figures from the U.S. Energy Information
Administration (EIA) due later in the day will provide clues on
the demand outlook for the world's top energy consumer, while a
batch of economic reports this week, topped by February
unemployment data on Friday, will shed light on the state of
the economy.
U.S. crude <CLc1> was down 19 cents at $41.21 a barrel by
0240 GMT, after rising $1.50 overnight, while London Brent
crude <LCOc1> fell 34 cents to $43.36 a barrel.
"The market still lacks direction at the moment. Investors
do not know what to focus on, given falling stock markets and
the really bad economic outlook," said Ken Haseagawa, manager
of commodity derivatives sales at Tokyo-based broker NewEdge.
"There's been no sign of any decrease in U.S. crude
inventories yet, so investors lack the confidence to take long
positions."
U.S. stocks fell in volatile trading on Tuesday, with the
S&P ending below 700 for the first time since October 1996, as
persistent uncertainty about the amount of money needed to
shore up the financial system overshadowed a hunt for bargains.
[]
Global energy demand has collapsed as the deepening
financial crisis threw major economies into a recession,
causing oil prices to tumble nearly $110 since the peak last
July, and OPEC to agree to a series of deep production cuts.
Further reductions are expected when the group next meets on
March 15.
Compliance with previous cuts has been strong, with OPEC
oil supply down in February for the sixth-straight month,
although output remained above target levels, a Reuters survey
showed. []
Libya's top OPEC official, Shokri Ghanem, said markets were
still oversupplied, and the exporter group needed to reduce
output, either through better compliance with existing supply
curbs or a new cutback. []
But OPEC President Jose Botelho de Vasconcelos said the
cartel had yet to decide whether to cut output further when it
meets. []
U.S. crude oil stockpiles dipped 463,000 barrels last week
amid lower import levels and higher demand from refiners, the
industry group American Petroleum Institute said on Tuesday.
[]
The EIA will release its inventory report for last week
later on Wednesday, and crude oil supplies are forecast to have
risen 1.2 million barrels, according to a Reuters poll. []
Oil traders consider the API report to be less accurate
than the EIA data, which requires energy firms to respond to
their weekly survey.
The market will also eye the release of key U.S. economic
data, including the ADP employment report for February at 1315
GMT, and February non-farm payrolls data on Friday. Both sets
of figures are expected to reflect rising unemployment in the
economy.
"We expect oil to trade in the $35-$45 range," Hasegawa
said. "If we see a continued increase in U.S. crude stocks, oil
could break below $35, but at that level, we would see some
buying interest emerging."
(Editing by Ben Tan)
(jennifer.tan@thomsonreuters.com; +65-6417 4679; Reuters
Messaging: jennifer.tan.reuters.com@reuters.net)
