Oil firm ahead of US stocks data, rate decision

LONDON - Oil hovered around $137 on Wednesday on an expected fall in U.S. crude oil inventories and ongoing supply disruptions from Africa's top producer Nigeria.

By (Reuters)

Published: Wed 25 Jun 2008, 8:29 PM

Last updated: Sun 5 Apr 2015, 1:13 PM

Traders are also closely watching the movement of the dollar ahead of the U.S. Federal reserve interest rate decision.

U.S. light crude dipped by 5 cents to $135.95 a barrel by 1119 GMT. On Tuesday, it rose as high as $138.75, just shy of the record high of $139.89 hit on June 16.

London Brent crude gained 17 cents to $136.63.

"There is the U.S. inventory data and the U.S. Federal Reserve meeting later today. Those two will be on top of the oil market's agenda," said David Moore, a commodities analyst at the Commonwealth Bank of Australia in Sydney.

U.S. crude oil inventories probably fell by 1.4 million barrels last week, extending a decline for the sixth time in a row, a Reuters poll of analysts showed.

The poll also showed an expected 200,000-barrel drop in gasoline supplies and a 1.9 million-barrel increase in distillates stocks.

The U.S. Energy Information Administration will release inventory data for the week to June 20 on Wednesday at 1435 GMT.

A weak dollar and continuing supply disruptions from Nigeria also kept oil prices near record levels, analysts said.

The dollar held steady against the yen and the euro on Wednesday after dipping the previous day as a report showed that U.S. consumer confidence had plunged to a 16-year low.

The weak data stirred doubts about the U.S. Federal Reserve's ability to raise interest rates and the Fed was expected to leave interest rates unchanged at the end of the two-day policy meeting on Wednesday.

U.S. oil major Chevron delayed some exports of Nigerian Escravos crude oil exports after armed youths blew up a supply pipeline last week, a company official said on Wednesday.

Tensions between Israel and Iran over Tehran's nuclear programme are also keeping supply jitters alive.

Analysts are concerned about threats to the Straits of Hormuz, a narrow waterway separating Iran from the Arabian Peninsula through which roughly 40 percent of the world's traded oil flows.

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