Oil prices steadied in early Asian trade on Tuesday after falling on strong U.S. manufacturing data that raised worries about further interest rate hikes dampening demand, while analysts predicted another build in American crude inventories.
Brent crude futures for April, due to expire on Tuesday, lost 20 cents to $82.25 per barrel by 0137 GMT, extending a 0.9% loss in the previous session. The more active May contract picked up 4 cents to $82.08 per barrel.
U.S. West Texas Intermediate (WTI) crude futures gained 11 cents to $75.79 a barrel.
The threat of more U.S. rate increases following stronger-than-expected new orders for core U.S.-manufactured capital goods in January kept a lid on oil prices, while U.S. Fed Governor Philip Jefferson said inflation for services in the United States remained "stubbornly high."
"The stronger than expected inflation numbers raised concerns about further hikes in interest rates, which has already curbed demand in the U.S.," ANZ analysts said in a client note.
The possibility that slower-growing wages might help limit inflation, however, kept crude from moving lower.
The market will be looking out for the latest U.S. oil stocks data due from the American Petroleum Institute industry group on Tuesday and the government's Energy Information Administration on Wednesday for further demand indicators.
A preliminary Reuters poll showed analysts expected crude stocks grew by 400,000 barrels in the week to Feb. 24, which would mark the tenth consecutive week of builds.
Seven analysts polled also estimated that gasoline stocks rose by about 700,000 barrels.
Helping to put a floor on prices, distillate inventories, which include diesel and heating oil, were expected to have decreased by about 500,000 barrels last week.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
