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Oil prices sag before weekly US energy report

Brent North Sea crude for delivery in February declined by 15 cents to $111.79 a barrel in London midday trade.

New York’s main contract, light sweet crude for February or West Texas Intermediate (WTI), reversed 15 cents to $93 a barrel.

The US government’s Energy Information Administration (EIA) was on Wednesday to publish its weekly snapshot of crude inventories in top consumer the United States for the week ending January 4.

“Crude oil prices are on a consolidation mode on Wednesday ahead of the release of the weekly EIA oil inventories data, following mixed signs across the equity markets and a flat dollar that fail to provide some direction,” said Sucden brokers analyst Myrto Sokou.

Market expectations are for crude reserves to rally by 2.2 million barrels, according to analysts polled by Dow Jones Newswires.

Stockpiles of distillates, which include diesel and heating fuel, are forecast to jump 2.1 million barrels. Gasoline or petrol reserves are seen gaining 1.4 million barrels.

Global markets have meanwhile shifted their attention from the US fiscal debate to corporate earnings to gauge the health of the world’s biggest economy and largest oil consuming nation going into 2013, analysts said.

“The recent fiscal cliff-inspired rally is fast becoming the ‘Ghost of Christmas Past’ as traders shift their focus to US corporate earnings,” said Jason Hughes, head of premium client management at IG Markets in Singapore.

“Solid gains notched up in the first week of the year across global markets are so far just being nibbled at by fears of disappointing fourth-quarter profits across US blue chip stocks.”

US aluminium producer Alcoa on Tuesday reported earnings of $242 million in the fourth quarter of 2012, compared with a year-earlier loss of $191 million. The results were boosted by a gain of $161 million related to the sale of a hydroelectric asset.

The company also stayed in the black for the full year, despite aluminium prices falling 12 percent.

Hughes said that while Alcoa’s earnings were “slightly” better than expected, analysts have been slashing back forecasts so the bar is already low.