Oil futures headed lower in electronic trade Wednesday, weighed by rising inventories and a tick higher in the U.S. dollar.
Benchmark U.S. crude oil for August delivery fell 64 cents, or 0.6%, to 105.36 a barrel by late afternoon in Hong Kong, extending the contract’s 32-cent loss during regular New York Mercantile Exchange trading on Tuesday.
Oil gave further ground after the Nymex close as the American Petroleum Institute reported a 2.6-million-barrel drop in U.S. crude inventories for the week ended July 12.
A Platts survey of analysts had forecast a decrease of 2.5 million barrels. Citi Futures analysts said following the data that the result suggested “the consensus view was not too far off, but the matter won’t be fully decided until we see the more definitive [Energy Information Administration] data due out” later Wednesday at 10:30 a.m. U.S. Eastern time.
Also, the U.S. dollar came off its lows, with the ICE dollar index edging up to 82.700 from late Tuesday’s 82.599 level. A rising U.S. currency can dampen commodity prices by making them more expensive in other currencies.
Bernanke’s comments last week that the central bank was in no hurry to raise interest rates had weighed on the dollar.
Elsewhere in the energy complex, the August gasoline contract erased its 3-cent advance Tuesday, falling 1.2% to 3.10 a gallon after the API report showed a 2.6 million barrel climb in gasoline stockpiles.
Citi Futures described the build in gasoline inventory as “bearish, even relative to our forecast.”
“This has the potential to spark a downdraft in prices on a wave of profit-taking, if confirmed” in the EIA numbers, they wrote late Tuesday.
August heating oil slipped 0.4% to 3.03 a gallon after the API report showed a 3.8-million-barrel increase in supplies of distillates, which includes heating oil.
Natural gas for August were off 0.4% at $3.66 per million British thermal units.
Source : Marketwatch
