Oil futures edged lower in electronic trade Wednesday, erasing some of their gains from the previous session as the dollar rose, with investors awaiting weekly supply data from the U.S.
October crude-oil futures gave back 30 cents, or 0.3%, to trade at $108.24 a barrel after rising 0.8% in Tuesday’s session on the New York Mercantile Exchange.
The modest loss for Nymex futures came as the U.S. dollar added to its gains, with the ICE dollar index rising to 82.386 from 82.344 late Tuesday in North America. A rising U.S. currency makes dollar-denominated crude more expensive to holders of other currencies, which can dampen investor demand.
October Brent crude was little changed, however, edging down just 6 cents to $115.62 a barrel, as reports said the U.S. Senate Foreign Relations Committee had reached a deal on a bill to approve military action against Syria.
Brent crude can sometimes be more sensitive to Mideast tensions than its Nymex counterpart, and while Syria is only a minor oil producer, several analysts say U.S. involvement could lead to a wider conflict, potentially including Iran, an ally of the Syrian regime.
U.S. action against Syrian government forces in retaliation for their believed use of chemical weapons against civilians looked more likely Tuesday after House Speaker John Boehner said he would support President Barack Obama’s request to authorize a military strike.
Boehner, a Republican, is normally a staunch opponent of Obama, and his promise to advise fellow party members to vote for authorization made its passage more likely.
While Syria was likely to remain a key factor in the oil price, investors were also looking ahead to weekly U.S. crude-supply data from the American Petroleum Institute, due out later Wednesday at 4:30 p.m. U.S. Eastern time.
Expectations called for a 2.5-million-barrel drop in crude stocks for the week ended Aug. 30, according to a Platts survey of energy analysts.
While government data from the Energy Information Administration showed late August U.S. oil production at a 24-year high, Platts cited robust refinery-run rates as likely to drive the drawdown in crude supplies.
“We have domestic production staying strong, but refineries are back on track, and that keeps the oil in the system,” Platts quoted Oil Outlooks president Carl Larry as saying.
The API data were due to be followed by the more closely watched EIA weekly supply numbers, due Thursday at 11 a.m. Eastern time. Both the API and EIA delayed their reports by a day because of the Monday’s Labor Day holiday.
Elsewhere in the energy complex Wednesday, October gasoline fell fractionally, holding at $2.86 a gallon, while October heating oil shed a penny, or 0.2%, to $3.14 a gallon
The Platts survey showed average expectations for gasoline stocks to fall by 1 million barrels for the previous week, while distillates, including heating oil, were tipped to rise by 800,000 barrels.
Meanwhile, October natural gas improved by 1 cent, or 0.4%, to $3.68 per million British thermal units, adding to a 2.4% surge Tuesday.
Source : Marketwatch