Oil slips before US energy reserves report

20th January 2011, Comments 0 comments

World oil prices dipped on Thursday as traders awaiting the release of a widely-watched US government energy inventory report.

Brent North Sea crude for delivery in March slid 32 cents to $97.84 a barrel in early morning London trade.

New York's main contract, light sweet crude for February, fell 22 cents to $90.64.

The report by the US Department of Energy is usually released on Wednesday but was delayed by a day because of a public holiday on Monday.

"The regular weekly US fuel inventory report is delayed until today due to a long holiday weekend in the United States," said VTB Capital analyst Andrey Kryuchenkov.

"We expect to see a small draw (down) in US crude inventories in the week to January 14 as the Trans-Alaskan pipeline disruption should have cut inventories coming in from Prudhoe Bay."

Analysts polled by Dow Jones Newswires expect US crude stocks to be down 900,000 barrels last week while gasoline (petrol) reserves are forecast to jump 2.3 million barrels.

A bleak snapshot of the US housing market appeared to dampen investor sentiment this week. The US is the world's biggest oil consumer and sluggish economic data is seen as affecting crude consumption.

"US crude declined as weak housing data fed worries about the economy ... Declines on Wall Street also weighed on crude oil prices," analysts from Singapore's Phillip Futures said in a report.

Data released Wednesday showed new housing starts across the United States stood at 587,000 in 2010, up slightly from the year before, but still the second lowest since 1959.

"The question for (traders) is how will economic data scroll out in a $90-plus crude oil environment?" said Mike Fitzpatrick, of the Kilduff Report.


© 2011 AFP

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