Oil Edges Up Ahead of Weekly U.S. Inventory Data

Oil prices edged up on Wednesday, brushing off four consecutive days of losses ahead of weekly U.S. data forecast to show yet another draw in crude stocks, but economic worries remain in the background.

U.S. light crude for February delivery, on its first day as the front-month contract, was up 49 cents at $90.57 a barrel by 0143 EST, after settling 97 cents lower on Tuesday when oil prices moved within a $4 range. London Brent crude was up 65 cents at $90.77.

Analysts called for an average 1.6 million barrels draw, which would further tighten crude inventories that are already at their lowest since March 2005.

Distillate supplies, which include heating oil, were seen down 500,000 barrels and gasoline stocks up 1.0 million barrels in the weekly data that will be released later on Wednesday.

NYMEX January heating oil took a beating on Tuesday, settling down 4.25 cents or 1.64 percent at $2.5554 a gallon.

After a cold start, private weather forecaster AccuWeather expects temperatures in the Northeast, the largest market for heating oil, to mostly average above normal for the rest of the week.

On Tuesday oil prices initially jumped more than $2 on news of a Turkish troop incursion into northern Iraq and a strike at French refineries.

But they fell sharply after the government of Iraq's Kurdish region said the Turkish troops had withdrawn and on renewed worries about the U.S. economy.

12/19/2007 6:30:00 AM