Oil prices have fallen as much one per cent for a second day in a row as a rallying US dollar and a global fuel glut offset forecasts for lower US crude stockpiles that typically would have been bullish for the market.
Oil prices have fallen as much one per cent for a second day in a row as a rallying US dollar and a global fuel glut offset forecasts for lower US crude stockpiles that typically would have been bullish for the market.
US crude stockpiles fell by 2.3 million barrels last week, trade group American Petroleum Institute (API) reported. That was just above a 2.1 million-barrels draw forecast in a Reuters poll. The US government's Energy Information Administration (EIA) will issue inventory data on Wednesday.
If the EIA confirms a drawdown, it will be the ninth straight week that US crude stockpiles have fallen.
Even so, the market's attention has been on an unexpected oversupply in fuels during the US peak summer driving season.
As storage on land tightened in recent weeks, fuel prices weakened, prompting traders to store diesel on tankers at sea for later delivery. Even if crude output tapers, some say the glut may continue to pressure prices.
"Unless crude imports fall totally out of bed, there's ample oil in the tanks, and the headline numbers for crude won't be as bearish as the total numbers," said Kyle Cooper, oil markets consultant for New York-based broker ION Energy.
For distillate inventories including diesel, API reported a surprise draw of 484,000 barrels. It also said there was an unexpected petrol build of 805,000 barrels.
"We expect fresh lows by tomorrow that should force out some recently acquired speculative longs that have been entering the market amidst the price consolidation of the past eight to nine sessions," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.
Brent crude settled down US30 cents, or 0.6 per cent, at $US46.66 barrel. It fell 1.4 per cent on Monday.
US West Texas Intermediate (WTI) crude fell US59 cents, or 1.3 per cent, to settle at $US44.65. WTI lost 1.6 per cent in the previous session.
Brent's premium to WTI reached its highest since the end of April, raising the export potential for US crude. Both benchmarks were little changed after the API data.
Also weighing on oil was the US dollar's rally to a four-month high, making greenback-denominated oil less affordable for holders of the euro and other currencies.
Earlier in the session, a protest over wages that shut the eastern Libyan oil terminal of Hariga and forced a suspension of 100,000 barrels per day of crude production helped the market limit some losses.
