Oil below $35 ahead of US crude stocks data
Oil stocks in the United States have already risen by 20 per cent since September as the economic downturn crushed consumption, which helped pull crude prices more than $110 off their peaks last summer.
A day ahead of expiry, US crude futures for March delivery rose 1 cent to $34.63 a barrel by 0152 GMT, while April delivery contracts rose 12 cents to $37.53. London Brent for April delivery rose 36 cents to $39.91.
Crude stockpiles in the United States likely rose last week by 3 million barrels to their highest since May 1998, a Reuters poll of analysts showed ahead of the US Energy Information Administration (EIA) data due out later in the day.
The American Petroleum Institute (API) said on Wednesday crude stocks rose last week by 1.6 million barrels. The EIA report is widely regarded as more accurate than the API's because US energy firms are required to participate.
With employment, housing and credit conditions in the United States showing no signs of a turnaround, the US central bank forecast the world's top economy would shrink by between 0.5 per cent and 1.3 per cent this year.
The US recession looks poised to last at least a few months longer, which would make it the longest downturn since the Great Depression, a top White House adviser said on Wednesday.
"We're going to keep leaning forward trying to do all the things that we can to propel the economy forward, because as the president has recognised, the risks of doing too little are much greater than the risks of doing too much," National Economic Council Director Lawrence Summers told CNN.
US President Barack Obama pledged up to $275 billion on Wednesday to help stem a wave of home foreclosures, part of a broad effort using massive sums of government money to lift the country out of recession.
But the plan failed to prop up sentiment on Wall Street, with the Dow closing barely higher on Wednesday and the wider S&P 500 index falling. Japan's Nikkei average edged up less than 1 per cent on Thursday.
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