WSJ:OIL FUTURES: Crude Slips in Asian Trading; US Inventory Data in Focus
By Jacob Gronholt-Pedersen
Crude-oil futures fell in Asian trading Wednesday from a seven-week high as hopes for further monetary stimulus faded while investors awaited weekly U.S. oil inventory data.
U.S. Federal Reserve Chairman Ben Bernanke painted a gloomy outlook for the country's economy and failed to deliver clear promises of further monetary stimulus in his testimony to Congress on Tuesday.
Crude prices had settled higher in the previous five sessions, partly in anticipation of actions to stimulate the U.S. economy. Prices fell in early trading Wednesday in tandem with Asian shares and a strengthening of the dollar against the euro and the yen.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $88.95 a barrel at 0650 GMT, down $0.27 in the Globex electronic session. September Brent crude on London's ICE Futures exchange fell $0.33 to $103.67 a barrel.
Oil prices have taken a beating in the last few months as euro-zone debt problems and bearish economic data from other major economies triggered concerns that demand for oil may fall. But sentiment has improved with the latest rebound in both West Texas Intermediate and Brent crudes, suggesting the bottom has already been reached.
"A 15%-17% rebound in both markers since late June suggests the bottom has passed," said analysts at ANZ in a note.
"Seasonality appears to be a positive influence with drawdowns on high U.S. crude-oil stocks, to fuel the peak of the U.S. driving season, encouraging buying," they said.
Eyes will be on the U.S. Energy Information Administration's weekly oil inventory data due later Wednesday. Stockpiles fell by 4.7 million barrels to 378.2 million barrels last week and are expected to have declined by another 1.1 million barrels in the week ended July 13, according to estimates from 11 analysts surveyed by Dow Jones Newswires.
Industry group The American Petroleum Institute said Tuesday that crude stocks fell by 2.01 million barrels last week.
Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--rose 79 points to $2.8529 a gallon, while August heating oil traded at $2.8375, 47 points lower.
ICE gasoil for August changed hands at $897.25 a metric ton, up $2.75 from Tuesday's settlement.
Write to Jacob Gronholt-Pedersen at jacob.pedersen@dowjones.com
