LONDON: Oil touched a two-week high above $78 a barrel on Wednesday, rising ahead of key inventory data out of the world s largest energy consumer, the United States, later in the session.
US crude for March delivery touched $78.04 a barrel, the highest since Jan. 21, and was trading up 61 cents at $77.84 at 0957 GMT.
London ICE Brent crude for March rose 66 cents to $76.72.
On Tuesday US crude soared 3.8 percent, the biggest gain for a front-month contract since Sept. 30, as the dollar dipped on the back of strong corporate earnings reports that boosted risk appetite and on signs China s oil demand will stay high in coming months.
After a long decline last month and a sharp rebound yesterday, it might be that we have reached a U-turn if the EIA data today is not too bearish, JBC Energy analyst David Wech said.
The US government s Energy Information Administration (EIA) will release stockpile and demand statistics at 1530 GMT, and inventories are expected to have edged up on higher imports, according to a Reuters poll.
The dollar was down 0.3 percent at 78.748 against a basket of major currencies, but was still near a six-month high of 79.534 touched earlier this week.
A stronger dollar makes commodities priced in the US currency more expensive for those holding other currencies.
The monthly Reuters foreign exchange poll, covering analysts forecasts for the euro, sterling, yen and dollar, will be released at 1215 GMT on Wednesday.
In a report late on Tuesday, the American Petroleum Institute (API) said US crude stocks jumped by 4.7 million barrels last week. That compared to an average forecast gain of 200,000-barrel in a Reuters poll.
The API said US gasoline stocks fell 1.2 million barrels and distillate stocks fell by 1 million barrels.
Wednesday s EIA data will obviously provide the market with further direction, and we suspect that if the numbers shadow the API figures, a slight downward dias could set in, said senior commodity analyst Edward Meir at MF Global in their daily report.
US gasoline stocks were forecast to have risen by 1.3 million barrels in the week to Jan. 29 and total distillate stocks, including heating oil and diesel, were projected to have fallen 1.1 million barrels.