NEW YORK (Reuters) - Oil rose slightly on Wednesday, holding above $77 a barrel in choppy, light-volume trading as the market weighed upbeat news from the Federal Reserve and other positive economic data against pressure from a stronger U.S. dollar.
U.S. crude for March delivery settled at $77.33 a barrel, up 32 cents.
Oil prices reached a session high of $77.82 a barrel and a low of $76.53 after closing 3.9 percent higher on Tuesday, the biggest percentage gain since it rose 5.8 percent on September 30.
London Brent crude for April settled at $76.27 a barrel, up 59 cents.
Oil traders were waiting for the release of oil inventory reports for the United States, the world’s top oil consumer, on Wednesday and Thursday.
“It is a draw of sorts. It’s impressive we’ve held yesterday’s gains. The Fed minutes did not roil the markets even with the announced exit strategy. So, we await the inventory numbers now to set the tone for the week,” said John Kilduff, partner at Round Earth Capital in New York.
The NYMEX front-month volume was 240,000 contracts in the mid-afternoon, relatively light for the day.
U.S. Federal Reserve policymakers announced Wednesday that they want to begin selling securities soon and that they see the U.S. economic recovery continuing.
The dollar rose against a basket of currencies on Wednesday, boosted by news that Federal reserve wishes to begin a program of asset sales in the near future and stronger-than-forecast U.S. housing and industrial output data. The euro was under continued pressure from Greece’s fiscal problems. <USD/>
U.S. housing starts rebounded more strongly than expected to their highest in six months in January, while permits fell slightly less than forecast, a government report showed on Wednesday.
Industrial output rose 0.9 in January, also exceeding analyst expectations.
Strength in the U.S. dollar typically pressures oil prices by discouraging non-U.S. investor interest in dollar-denominated commodities.
Industry group American Petroleum Institute (API) will issue data at 4:30 p.m. EST (2130 GMT) on Wednesday — delayed one day due to a holiday — while the Energy Information Administration’s (EIA) data is due at 11 a.m. EST (1600 GMT) on Thursday.
Crude inventories in the United States were expected to have risen by 2.2 million barrels in the week ended February 12, as imports that had been delayed by weather along the Gulf Coast came ashore, according to a Reuters poll of analysts on Wednesday. <EIA/S>
Distillate stocks, which include heating oil and diesel, fell by 1.5 million barrels, with demand for heating fuel seen higher after two heavy snowstorms hit the U.S. East Coast. Gasoline supplies rose by 1.5 million barrels, the poll showed.
Additional reporting by Robert Gibbons and Gene Ramos in New York, Chris Baldwin in London, Seng Li Peng in Singapore; Editing by David Gregorio and Lisa Shumaker