Kate Mackenzie Markets: Oil dips as petrol reserves swell

Neil Dennis writes:

Oil prices fell on Wednesday after data from the US showed an unexpected rise in petrol reservoir volumes.

The data published on Tuesday by the American Petroleum Institute, showed volumes in the nation’s petrol reservoirs swelled by 3.7m barrels – more than the expected rise of 1.3m barrels.

Figures published later in the session by the US government’s Energy Information Administration were expected to confirm the API numbers.

“The API figures are not a favorable precursor for the EIA numbers when these get released later on Wednesday, and that is why prices are off this morning,” said Edward Meir at MF Global.

By late morning, Nymex crude was down 50 cents at $68.74 a barrel, while Brent was off 43 cents at $68.37 a barrel.

Traders noted, however, that with a decision on US monetary policy looming later, the current bearish tone could lift if the dollar is hit by the Federal Reserve’s announcement.

“On Tuesday, the greenback fell by its greatest amount in six weeks against the euro on expectations that the Fed will keep rates close to zero for the rest of this year,” Mr Meir added.

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