07.08.201307:19:06UTC+00Oil futures clinch minor advances after inventory drop

Benchmark U.S. crude-oil futures hold on to a thin increase Wednesday after weekly crude stockpile levels recorded a larger drawdown than had been anticipated.

Crude oil for September delivery jumped 5 cents, or 0.1%, at $105.35 a barrel, paring earlier gains.

Prices had turned greater after the close of trade on the New York Mercantile Exchange, following the American Petroleum Institute’s report that crude stockpiles retreated 3.7 million barrels in the week ended Aug. 2, according to reports.

That was more than the decrease of 2 million barrels that analysts polled by Platts had forecast.

Investors, looking for signals on energy supply, will comb through the U.S. Energy Information Administration ‘s own inventory report, due at 8:30 a.m. Eastern time.

The API also said distillate stocks increased by 1.5 million barrels, while gasoline stocks decreased by 971,000 barrels. Analysts had expected inventory for each to decline by 1 million barrels.

Oil futures on Tuesday had given up $1.26, or 1.2%, in Nymex trade, keying off of sharp losses on Wall Street after two Federal Reserve officials separately indicated that the central bank appears ready to start reducing the amount of bond purchases this year.

Crude prices moved down 1.5% so far this week.

U.S. crude has dropped “into the lower half of a $103-to-$109 trading channel,” CMC Markets senior market analysts Colin Cieszynski told clients late Tuesday.

“The formation of a head-and-shoulders top in the relative strength index represents a rare but bearish potential signal, which combined with a double top suggests price at risk here,” Cieszynski wrote.

Energy and equity investors will hear more talk about potential tapering of monetary stimulus when Philadelphia Fed President Charles Plosser and Cleveland Fed President Sandra Pianalto speak later Wednesday.

Meanwhile, September Brent crude fell 24 cents, or 0.2%, to $107.94 a barrel on ICE Futures ahead of the June industrial production report from Germany.

September gasoline skidded 1 cent, 0.1%, to $2.91 a gallon, and September heating oil relinquished 1 cent, or 0.2%, to $3 a gallon.

Natural gas for September delivery missed 2 cents, or 0.6%, to $3.30 per million British thermal units.