UPDATE 8-Oil slips after retreat from 3-month peak
* U.S. crude stocks drop, but products stocks rise
* Dollar bounces up broadly, weighs on oil
* Coming up: U.S. jobless claims 8:30 a.m. EDT Thursday (Recasts, updates prices, market activity to settlement)
By Selam Gebrekidan
NEW YORK, Aug 4 (Reuters) - U.S. crude oil settled slightly lower after four straight sessions of gains on Wednesday, retreating from a three-month high as a stronger dollar and weak gasoline futures offset a government report of falling crude oil inventories.
U.S. crude for September CLc1 delivery fell 8 cents to settle at $82.47 a barrel. It traded in a range from $81.62 to a high of $82.97, the highest front-month price since $86.24 was struck on May 4.
Crude prices had climbed about 7.5 percent since July 28, the last time prices settled lower.
U.S. September RBOB gasoline futures RBc1 fell 1.85 cents to settle at $2.1750 a gallon. September heating oil futures HOc1, the U.S. benchmark distillate, managed a 0.22 cent gain to settle at $2.2022 a gallon.
Front-month ICE Brent crude LCOc1 fell 48 cents to settle at $82.20 a barrel.
The dollar rebounded from an eight-month low against the yen on Wednesday and rose against the euro as encouraging U.S. employment and service sector data prompted traders to unwind bets against the U.S. currency. [USD/]
"It has been a tug of war with the markets today with competing bullish and bearish (news). The dollar is back up and it is putting downward pressure on crude prices," said Phil Flynn, analyst at PFGBest Research in Chicago.
Oil was supported by a report from the U.S. Energy Information Administration that showed U.S. crude inventories fell by 2.8 million barrels to 358 million barrels in the week to July 30, falling more than expected. [EIA/S]
The drop in stockpiles came as imports fell by 1.52 million barrels a day to 9.6 million bpd.
But gasoline stocks rose 729,000 barrels to 223 million, against forecast for stocks to be down 400,000 barrels.
Distillate fuel stocks, which include diesel and heating oil, rose 2.2 million barrels to 169.7 million, much more than the forecast for a build of 1.2 million barrels.
Before the EIA report, oil and U.S. stocks received support from Institute for Supply Management data showing the U.S. service sector grew slightly more than expected in July. [ID:nN04224566]
The ISM report followed similar upbeat data on euro zone service sector that had helped lift global equities and a report from private payrolls processor ADP that showed 42,000 private sector jobs were created in July, marginally beating estimates. [ID:nN04224566]
For a graphic of oil's returning currency correlation:
CAUTION ON IRAN
The market reacted cautiously to news of an attack on Iranian President Mahmoud Ahmadinejad. [ID:nLDE6730W3] [ID:nLDE67312D]
"Prices haven't moved today but we've just had a very strong rally," said Paul Harris, head of natural resources risk management at Bank of Ireland. "Geopolitical risk from the Middle East is broadly priced in."
Oil traders also were monitoring the dispute between Israel and Lebanon. Israel said on Wednesday it holds Lebanon and Hamas responsible for separate attacks on its territory this week and will continue to respond forcefully to violence. [ID:nLDE673253] (Additional reporting by Robert Gibbons and Rebekah Kebede in New York, David Turner and David Sheppard in London and Alejandro Barbajosa in Singapore)
- Tweet this
- Share this
- Digg this