World oil prices pull lower before US energy report
Crude oil prices fell on Wednesday as many traders took profits before a bank holiday weekend and the latest snapshot of energy inventories in the United States.
New York's main contract, light sweet crude for delivery in July, sank $1.22 to $98.37 per barrel.
Brent North Sea crude for July retreated $1.13 to $111.40 a barrel in morning London trade.
The market had rebounded on Tuesday, lifted by a weak dollar and a bullish price forecasts from US banks Goldman Sachs and Morgan Stanley.
"Investors might be taking in profits as it is approaching a long weekend in the US market," said Ker Chung Yang, commodity analyst for Phillip Futures in Singapore, referring to a public holiday on Monday to mark Memorial Day.
Later on Wednesday, the US government's Department of Energy will unveil the state of American reserves in the week ending May 20.
"Today, the market briefly turns its attention to inventory numbers," said VTB Capital commodities analyst Andrey Kryuchenkov.
Crude inventories are expected to drop by 1.2 million barrels, according to analysts polled by Dow Jones Newswires.
Gasoline or petrol stockpiles are seen falling by 100,000 barrels, while distillates -- including diesel and heating fuel -- are forecast to remain unchanged.
Kryuchenkov added that the gasoline figures will be eagerly awaited ahead of the peak-demand driving season in the United States, which sees many Americans hit the road for the holiday season.
"We shall also be keeping a close eye on gasoline demand as we are only one week away from the official start to the summer driving season in the United States and so far petrol numbers have been far from impressive," he said.
Despite Wednesday's losses, analysts said that prices remain on an upward trend, partly due to the continuing turmoil in the crude-producing Middle East and North Africa region.
Goldman Sachs estimated this week that Brent oil would hit $130 a barrel over the next 12 months.
Morgan Stanley also raised its 2012 forecast to $130 a barrel, from $105, predicting tight supplies caused by loss of production in Libya, where NATO air strikes are helping rebels try to oust strongman Moamer Kadhafi.
© 2011 AFP