Oil down about 2%

What started out as an up day for oil prices has ended lower. Hopes of oil going higher were hinged on the distillates showing big drawdowns on the back of the cold weather in the US. The report pretty much matched expectations and gave ammo to the bears. I'm a little bit cautious on the sector and finished the day square. I want to see where oil finds some support. With the cold weather likely to pass in the next few weeks, are we going to see a return of focus on the bearish fundamentals (ample supplies)? Or will oil find some support around 55 with news of OPEC cuts and Iran etc. Heard some traders @ Nymex mention they think we are still trending higher..Will be interesting to see where we close tomorrow and Friday. We should see weakness in the oil sector tomorrow until there is some firm direction on the price of oil.

Oil rises...

Oil rises as traders await US weekly stocks dataLONDON (AFX) - Oil edged up as traders prepared for a US weekly stocks report that is expected to show a decline in distillate stocks following a recent cold snap in the Northeast of the country.At 9.44 am, front-month Brent North Sea crude contracts for March delivery were up 67 cents at 59.08 usd a barrel, after gaining 32 cents to settle at 58.42 usd yesterday.Meanwhile, front-month New York light sweet crude contracts for March delivery were up 60 cents to 59.49 usd a barrel, after rising 14 cents to close at 58.88 usd yesterday. The US Energy Information Administration will release its weekly report at 3.30 pm today.Analysts expect it to show distillate stocks, including heating oil, to have dropped by 3.2 mln barrels for the week ending Feb 2. However, crude oil inventories are expected to have risen by 1.4 mln barrels."The recent bout of cold weather reports are eating into heating oil and distillate supplies and have been driving the market higher," said CMC Markets trader Andrew Henderson.