Oil prices dipped on Wednesday ahead of the latest US inventories data while base metals retreated after a sharp fall in the Chinese stock market.
In energy markets, Nymex September West Texas Intermediate dipped 35 cents to $68.85 a barrel. The September contract expires on Thursday and October WTI contract traded 55 cents lower at $70.55. ICE October Brent lost 44 cents at $71.93.
Crude oil prices staged a late rally in a volatile session on Tuesday after the American Petroleum Institute said crude oil inventories fell by a whopping 6.1m barrels last week, way above expectations.
The API data is not as comprehensive as the figures released by the Energy Information Administration, the statistical arm of the US Department of Energy.
“It should be noted that the EIA numbers have not been tracking the API so closely of late, and considering the strong price gains of the past 24 hours, the possibility of a downside reversal below the $70 mark remains strong,” said Ed Meir of MF Global.
The EIA data, due for release later in the session, were expected to show US crude stocks rose 1.3m barrels last week, according to a poll of analysts by Reuters. Meanwhile, gasoline inventories were seen falling 1.1m barrels and distillates stocks were forecast to have risen 600,000 barrels.
Nymex September RBOB unleaded gasoline traded 2.4 cents weaker at $1.9757 a gallon while Nymex September heating oil lost 1.8 cents at $1.8467 a gallon.
Demand for crude from US refineries has remained weak and refinery utilisation was expected to increase just 0.1 percentage points to 83.6 per cent, after declining for the previous four weeks.