Oil eased to around $70 a barrel today pressured by weaker stock markets as investors awaited a US inventory report expected to show supplies declined in the world's top consumer.
European shares slid for a fourth day as some investors unwound trades which had bett on a speedy economic recovery. Late yesterday, the American Petroleum Institute released inventory data that was largely bearish.
US crude for July eased 40 cents to $70.07 a barrel by 10.32am, having settled 15 cents lower at $70.47 yesterday. Brent crude for August slipped 18 cents to $70.06.
The US Energy Information Administration releases its weekly oil supply report today. The API data late yesterday showed a smaller than expected rise in crude stocks and a surprise increase in gasoline.
Analysts polled by Reuters expect crude supplies to fall 1.7 million barrels and gasoline inventories to decline by 100,000 barrels. The API reported crude stocks fell 1.3 million barrels and gasoline rose by 2.1 million barrels.
Oil traders consider the EIA report to provide a more complete snapshot of supplies because companies are required to respond to its weekly survey.
Some support for oil came from a weak dollar, which resumed its decline against other currencies today. A weaker dollar can boost investor demand for oil and commodities.
Oil hit a 2009 high above $73 last week, lifted by expectations of economic recovery that would increase fuel demand. Prices are still far below the record high above $147 reached last year.
President Barack Obama will unveil today plans for sweeping reform of US financial regulation, aimed at averting future crises like the banking meltdown that has plunged the global economy into recession.
Reuters