Markets: Oil dips ahead of US inventories

Oil prices dipped on Wednesday ahead of the latest US weekly inventories data while sugar continued to trade strongly and aluminium broke above the $2,000 a tonne level, leading base metals higher.

In crude oil markets, ICE September Brent dipped 13 cents to $74.15 a barrel after hitting $74.89 in the previous session. a high for 2009.

Nymex September West Texas Intermediate lost 34 cents at $71.08 a barrel.

WTI was trading at a substantial discount of around $3 a barrel to Brent because of weak demand and high stock levels in the US, a theme for the latest inventories data due for release later in the session.

US crude stocks were forecast to have risen 800,000 barels last week, according to a poll of analysts by Reuters, as refineries were expected to have reduced demand.

Refinery utilisation was seen dropping 0.3 percentage points to 84.3 per cent, falling for a third week in succession.

Traders will also pay attention to US crude imports which were up strongly in last week’s release, running at more than 10m barrels a day.

Gasoline stocks were forecast to fall 1m barrels but demand has been anaemic in recent weeks. Nymex September RBOB unleaded gasoline traded less than 2 cents lower at $2.0399 a gallon.

Distillate stocks, already standing at their highest levels for almost 25 years were seen rising for an eighth week in succession with an increase of 1.2m barrels.

Nymex September heating oil dipped less than ½ cent to $1.8970 a gallon.