Oil prices fall, focus on US demand
Oil prices fell on Thursday with the market focused on Federal Reserve chief Ben Bernanke's latest economic testimony and the demand picture for US crude, traders said.
Brent North Sea crude for delivery in September dropped 35 cents to stand at $108.26 a barrel in London midday deals.
New York's main contract, West Texas Intermediate (WTI) for August, slipped 11 cents at $106.37 a barrel.
Bernanke told Congress on Wednesday that the US central bank had no firm timetable for cutting back on its bond purchases, and that it would consider reducing its stimulus programme only if the economy continues to improve.
"I emphasise that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course," he told the lawmakers. The Fed chief was to give more testimony on Thursday.
Desmond Chua, analyst at traders CMC Markets, told AFP on Thursday: "There is a dollar factor at play here. Bernanke's comments have strengthened the US dollar and that is easing demand for crude."
A stronger greenback makes dollar-priced oil more expensive for buyers using weaker currencies. That tends to dent demand and push prices lower.
Analysts said however that oil prices will remain supported by signs of stronger demand in the United States, the world's top crude consumer, as well as fears of a disruption in Middle East supply caused by Egypt's political turmoil.
"High demand in the US and the continuing crisis in Egypt are likely to keep prices elevated in the near term," said Sanjeev Gupta, head of the Asia-Pacific Oil and Gas Practice at consultancy EY, formerly Ernst and Young.
The official crude inventories report by the US Department of Energy on Wednesday showed supplies in the US fell 6.9 million barrels in the week to July 12.
The drop, which comes during the summer driving season when Americans take to the roads for their holidays, beat the 2.2 million barrels estimated by analysts in a Dow Jones Newswires survey.
© 2013 AFP