LONDON: Brent crude oil dipped slightly on Wednesday as expectations for a build in US crude inventories and a stronger dollar offset support from improving economic sentiment, though supply worries helped keep it near 11-month highs.
Brent crude fell 43 cents to $125.79 a barrel by 0933 GMT, after settling at its highest close since last April at $126.22 on Tuesday. US crude eased 26 cents to $106.45.
Brent has been contained in a range between around $124 and $126 for a week, and traders said supply worries were keeping it at these elevated levels.
"The market is pinned in a sideways range," said Christopher Bellew at Jefferies Bache. "Without Iran, Syria and maybe Sudan, we would be lower. But without more newsflow on Iran we don't go higher either.
"Emphasizing the fact that supply worries are a major concern for market players, the International Energy Agency (IEA) said oil supply from non-Opec countries will grow less than expected.
"I would expect a break to the upside at some point as supply worries, low stock cover and good growth in Far East outweigh Europe's travails," Bellew said.
Attention will turn to data from the US government's Energy Information Administration at 1430 GMT, which is expected to report a fourth straight rise in weekly crude oil inventories.
US commercial crude oil stockpiles were forecast to have climbed 1.7 million barrels, according to a Reuters survey of analysts. Gasoline stocks were expected to be down 1.0 million barrels, with distillates to have fallen 1.3 million.
The industry group American Petroleum Industry on Tuesday estimated US crude inventories rose 2.8 million barrels in the week to March 9.
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