By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Crude oil futures edged lower in electronic trading Wednesday ahead of a closely-watched U.S. inventory report due out later in the global trading day.
Crude for September delivery CL1U -0.25% lost 15 cents, or 0.2%, to $99.44 a barrel on the New York Mercantile Exchange during Asian trading hours.
Macro-economic risk continues to overshadow the oil market, analysts at Barclays Capital said, with the uncertainty likely to persist over the coming days. “In recent months the background of sovereign debt issues has represented the major force capping oil prices,” the analysts said.
The impasse between U.S. lawmakers over raising the debt-ceiling continued to stoke fears about future energy demand, and lured investors to the traditional safe-haven of gold, on Wednesday. Read more about metal markets
Amid the deadlock, House Speaker John Boehner was rewriting his bill raise the limit before the Aug. 2 deadline. Read an overview of U.S. lawmakers’ rival debt-plans
“With the U.S. failing to reach any agreement to tackle their debt issues, the probability of a downgrade remains,” the analysts at Barclays Capital said.
“This, along with seasonal illiquidity, is likely to keep the downward pressure on prices intact, as they are caught between the restraining influence of the headline risks, and the support of its own fundamentals,” they added.
The Department of Energy Information Administration inventory report is due out Wednesday, and analysts forecast a fall in crude inventories by 1 million to 2 million barrels.
Late Tuesday the American Petroleum Institute showed crude-oil inventories rose 3.96 million barrels on the week ended July 22.
Gasoline stockpiles declined 639,000, the trade group said. Stocks of distillates, which include heating oil and diesel, rose 2.9 million.
Virginia Harrison is a MarketWatch reporter based in Sydney.
