(New York) Oil prices ended close to balance on Tuesday on the eve of a weekly report on U.S. crude and petroleum product reserves.

 

The barrel of North Sea Brent for delivery in March grabbed 0.05 % or 3 cents in London to finish at $55.91 .

The U.S. barrel of WTI for the same month gave up 0.08 % or 4 cents, to $52.61 .

The U.S. Energy Information Agency (EIA) will release its traditional report on the state of U.S. inventories late Wednesday morning.  

Analysts expect an increase in the reserves of crude (+1.5 million barrels) and gasoline (+1.4 MB), but a decline in those of distilled products (-700,000  barrels).

Before experiencing a slight decline at the end of the session, oil prices were up the rest of the day, expecting a decline in production in the weeks and months to come.

" Expectations of a tightening of global supply offset fears that a chaotic launch of COVID-19 vaccination campaigns will further dull demand" for crude, said Avtar Sandu, an analyst at Phillip Futures.

The fact that Iraq promised to reduce its oil production in January and February, according to information reported by Bloomberg, and that " US President Joe Biden may announce on Wednesday preparatory measures for a ban on new oil and gas drilling on federal lands  " are likely to support prices, Sandu continues.

Investors welcome the Iraqi announcement all the more as Baghdad is generally not one of the good students of the Organization of the Petroleum Exporting Countries (OPEC) and regularly exceeds the production quotas assigned to it by the cartel and its allies via OPEC+.

U.S. production remains relatively high, at 11 million barrels per day, according to the latest figures released Friday by the EIA.

But the uptrend is calming down, notes another analyst, Stephen Innes of Axi, due to " concerns about the effectiveness and deployment of the COVID-19 vaccine."

In addition, " Iran plans to massively increase its production ," reports Eugen Weinberg of Commerzbank. But " oversupply is the last thing the oil market needs right now ," says Oanda's Jeffrey Halley.