Investing.com – Crude oil futures edged lower on Wednesday, easing off a three-week high as a broadly stronger U.S. dollar reduced the appeal of commodities, while some mild-profit taking emerged after Tuesday’s sharp gains.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD96.60 a barrel during European morning trade, edging 0.2% lower.
It earlier fell as much as 0.3% to trade at a daily low of USD96.51 a barrel.
Prices rallied nearly 2.15% on Tuesday to hit USD97.00 a barrel, the highest since June 15 after Barclays and Deutsche Bank both upgraded their oil price forecasts, citing increased future demand from emerging markets.
However, the rally prompted some investors to sell their position and lock in gains.
Prices came under pressure as the U.S. dollar strengthened to a one-week high against the euro after ratings agency Moody’s downgraded Portugal’s sovereign debt rating to junk status, adding to lingering fears over the region’s debt crisis.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.25% to trade at 75.19, the highest level since June 29.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Meanwhile, markets were awaiting fresh information on U.S. stockpiles of crude and refined products, which come a day later than usual due to the Independence Day holiday.
The American Petroleum Institute will release its inventories report later in the day, while Thursday’s government report could show stockpiles declined by 2.5 million barrels last week, the longest streak of withdrawals since January.
U.S. oil supplies have declined nearly 3.8% since the end of May amid U.S. peak gasoline demand and the start of the Atlantic hurricane season.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery slumped 0.7% to trade at USD112.73 a barrel, up USD16.13 on its U.S. counterpart.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD96.60 a barrel during European morning trade, edging 0.2% lower.
It earlier fell as much as 0.3% to trade at a daily low of USD96.51 a barrel.
Prices rallied nearly 2.15% on Tuesday to hit USD97.00 a barrel, the highest since June 15 after Barclays and Deutsche Bank both upgraded their oil price forecasts, citing increased future demand from emerging markets.
However, the rally prompted some investors to sell their position and lock in gains.
Prices came under pressure as the U.S. dollar strengthened to a one-week high against the euro after ratings agency Moody’s downgraded Portugal’s sovereign debt rating to junk status, adding to lingering fears over the region’s debt crisis.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.25% to trade at 75.19, the highest level since June 29.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Meanwhile, markets were awaiting fresh information on U.S. stockpiles of crude and refined products, which come a day later than usual due to the Independence Day holiday.
The American Petroleum Institute will release its inventories report later in the day, while Thursday’s government report could show stockpiles declined by 2.5 million barrels last week, the longest streak of withdrawals since January.
U.S. oil supplies have declined nearly 3.8% since the end of May amid U.S. peak gasoline demand and the start of the Atlantic hurricane season.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery slumped 0.7% to trade at USD112.73 a barrel, up USD16.13 on its U.S. counterpart.