LONDON: Oil prices edged lower on Tuesday, pressured by a stronger dollar and concerns about global growth prospects after a slew of weak economic data, bringing losses to around 15 percent so far in May.
ICE Brent for July fell 56 cents to $110.28 a barrel by 1245 GMT. US crude futures for June delivery fell 67 cents to $96.70 a barrel on the day of the front-month expiry.
"There's a reassessment of the fundamentals, and there's a perception that the current price is too high for the fundamentals with demand being affected by the high oil prices, so they have to correct," said Christophe Barret, oil analyst at Credit Agricole Corporate and Investment Bank.
Prices fell after earlier trading in positive territory on a jump in the dollar index, making oil more expensive for non-dollar buyers.
US oil prices are set for their biggest monthly price drop since January 2009 and have been volatile since falling 10 percent in a single session on May 5. Daily volatility based on data from one market close to the next has flattened in the last couple of days but is still near 25-month highs, Reuters data showed.
Concerns about the European debt crisis also weighed on Tuesday, with markets watching to see if peripheral economies will be able to meet their obligations. A senior European finance official acknowledged for the first time on Tuesday Greece may have to restructure its debt, a move which could blow Europe's sovereign debt crisis wide open again.
Lacklustre growth in key economies added to bearish sentiment after data showed manufacturing growth in New York State slowed much more than expected in May, while German investor sentiment also disappointed.
STOCKS
US crude inventories likely rose for the fourth straight week as higher imports outpaced refinery demand, a preliminary Reuters poll ahead of weekly industry and government reports showed on Monday.
Crude inventories were expected up 1 million barrels in the week to May 13 and gasoline stocks were seen up 1.1 million barrels. If confirmed, this could stoke a further sell-off in RBOB gasoline futures after a 5 percent slide on Monday within days of the start to the US peak summer driving season.
Traders watched for a further rise in inventories at the US delivery point of Cushing, Oklahoma, which hovered just below record highs.
Fears that rising water levels on the Mississippi River would affect eight refineries in Louisiana have abated following news US army engineers began opening flood gates.
Trading volumes on US crude have fallen so far this week in a move that some analysts took as a sign of uncertainty about price direction, with liquidity less than half the multi-year highs hit in the immediate aftermath of the crash in early May.
The previous day, the contract fell below the 100-day moving average at around $98.40 a barrel -- a key technical support level which Olivier Jakob of Petromatrix said could be converted to the new price ceiling.
"Regaining that level ($98.40) is not yet out of reach but for now we will have to watch whether it becomes a line of resistance," he said in a daily note.
OPEC producer Libya's top oil official Shokri Ghanem, chairman of Libya's National Oil Corporation has defected from the government of Muammar Gaddafi, the rebels' finance and oil minister said on Tuesday.
Comments
Comments are closed.