Brent crude slipped below $104 a barrel on Wednesday, snapping five days of gains as Federal Reserve Chairman Ben Bernanke offered no signs of further monetary stimulus to boost growth in the world’s top oil consumer.
Oil also slipped as a 16 percent increase in prices from the the lows for the year touched last month prompted some investors to book profits. Broader markets, from Asian shares to the euro, edged higher as Bernanke in his testimony to the Senate Banking Committee left the door open for more stimulus.
Brent crude slipped 67 cents to $103.33 a barrel by 0258 GMT, after settling 63 cents higher. U.S. oil slipped 40 cents to $88.82 a barrel after ending 79 cents higher.
“Bernanke’s comments were in line with the last set of minutes – examining ways of doing more should that be necessary,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “Oil has recovered from its June lows pretty close to its medium-term equilibrium and that is why we are seeing a bit of softening. There is some profit-taking.”
Bernanke said the Fed stands ready to offer more stimulus as needed but stopped short of signaling action in the near term.. He also said recovery was being held back by anxiety over Europe’s debt crisis and expressed unease over a stagnant jobs market.
Investors are now awaiting data on crude stockpiles in the United States due later in the day from the Energy Information Administration (EIA) to confirm an industry report that inventories have fallen more than expected.
Crude inventories fell by 2 million barrels in the week to July 13, gasoline stocks fell by 116,000 barrels and distillate stocks rose by a sharp 3.4 million barrels, data from the American Petroleum Institute showed.
A Reuters poll of 10 analysts forecast a 1.2 million barrel drop in domestic crude inventories. Gasoline inventories were forecast up 1.2 million barrels, on average, while distillate stocks were projected to rise 1.5 million barrels.
Reuters
