Oil steadied below $70 today after four consecutive days of losses as the market waited for a second set of US inventory data and kept an eye on the outcome of the US Federal Reserve's two-day meeting.
Weekly stocks data from the American Petroleum Institute (API) showed an unexpected fall of 1.4 million barrels in crude stocks, together with a larger-than-expected 2.3 million barrels fall in gasoline stocks.
But the data, released after yesterday's prices settlement, failed to lift the market, which tracked losses on equity markets after doubts over the strength of the US economic recovery resurfaced.
US light crude for September delivery fell 11 cents to $69.34 a barrel by 7.02am, having lost $1.15 yesterday on Wall Street losses and after the Energy Information Administration (EIA) revised down its global oil demand forecast.
London Brent crude fell 32 cents to $72.14.
“Today traders will be watching the Fed meeting and the EIA data. The stronger dollar and waning sentiment for equities have been short-term bearish for crude, which has been trading as an asset class recently," said Jonathan Kornafel, Asia director of US-based Hudson Capital Energy.
The Energy Information Administration (EIA) will release its own weekly inventory data at 2.30pm. Data from the EIA and API can diverge widely.
An expanded Reuters poll of analysts yesterday showed expectations of a 700,000-barrel rise in crude stocks, a 1.3-million-barrel increase in gasoline stocks and a 200,000-barrel drop in distillates stocks.
Traders will also keep a close eye on the two-day US Federal Reserve meeting that ends later today with a statement expected at about 7.15pm.
Policymakers will steer a careful course in acknowledging signs a turnaround may be near without triggering expectations that interest rate rises are imminent.
The Fed is instead expected to acknowledge encouraging signs - including moderating job losses in July - while reemphasizing that it expects any future growth to be sluggish and accompanied by persistently high unemployment.
Reuters