(RTTNews) - The price of crude oil eased near $96 Wednesday morning after China hiked its lending rates to cool off its red hot economy. Also, a firm U.S. dollar weighed on oil prices.
Light Sweet Crude Oil (WTI) futures for August delivery were down $0.70 to $96.19 a barrel. Yesterday, oil gained around 2 percent as optimism about the U.S. economy and a higher price forecast for crude oil in 2012 from Barclay's Capital eased concerns about the global demand.
China has surpassed the U.S. as the world's largest energy consumer, a report by a British oil firm says. According to the "Statistical Review of World Energy" for 2010, released by BP Plc (BP), China is the world's biggest energy consumer, accounting for 20.3 percent of last year's total energy use, relegating the U.S. to the second place with 19 percent.
Meanwhile, China's central bank said today it will raise its benchmark deposit and lending rates by 0.25 percentage point, its third rate increase this year.
This morning, the U.S. dollar continued to level off from its monthly low versus the euro, and moving higher against sterling. The buck was little changed versus the yen and the Swiss franc.
Late Tuesday, Moody's Investors Service downgraded Portugal's credit rating to junk status.
Traders will look to the ISM's non-manufacturing report for June due out at 10.00 a.m ET. The non-manufacturing index is expected to ease back to 54 in June from 54.6 in May.
Today after the market hours, the API will release it U.S. crude oil inventories report for the week ended July 01. Analysts expect crude oil inventories to dip by 2.5 million barrels last week.
