• search

Oil dips below $75 on stock build, inflation risk

Written by: Staff

TOKYO, July 7 (Reuters) Oil fell below a barrel on Friday on an unexpected increase in domestic U.S. gasoline supplies, giving a break to a run to record highs earlier this week.

Oil traders were closely watching U.S. jobs data due later on Friday, concerned that risks of inflation could affect energy demand.

U.S. crude ticked lower by 39 cents, 0.49 percent, to .75 a barrel by 0204 GMT. It settled 5 cents down on Thursday, trimming a rally that ran from late-June to a record .40 struck on Wednesday.

Gasoline stocks in the United States, the world largest oil consumer, rose 700,000 barrels last week, U.S. government data showed on Thursday.

That was against analysts' forecasts for a drop.

''The market had targeted a fresh record high, guessing the U.S.

inventory data would show bullish figures, but that was betrayed by a gasoline stock build,'' said Keith Sano, the manager at commodities business unit at Sumitomo Corp. in Tokyo.

''Most likely, the market will sink as traders will try to lock in profit at the -level ahead of the weekend.'' But traders said strong U.S. demand would give long-term support to the market, along with lingering concerns over supplies from key oil exporter Iran amid its nuclear row with the West, and a partial loss of Nigerian oil output.

The government oil data showed U.S. gasoline demand increased 1.4 percent over the last four weeks to June 30 from a year earlier. The number of drivers was forecast to have risen to a record during the July 4th Independence Day holiday.

The latest auto fuel stock level was 3.1 million barrels down on year-on-year.

The world's fourth largest exporter, Iran, on Thursday failed to reply to major powers' proposals aimed at defusing the dispute over its nuclear programme.

Ali Larijani, secretary of Iran's Supreme National Security Council, told reporters he would give a preliminary response next week.

In eighth-ranked exporter Nigeria, where some oil production has already been lost due to militant attacks, gunmen abducted a Dutch man who was working on an unfinished Shell plant.

Despite that, a strong tone was dominating the recent market.

Traders said inflation risks, which could affect global oil demand, had to be kept in mind.

Economists have revised up their forecasts for the upcoming U.S job figures later on Friday, after strong private sector jobs data on Wednesday.

That boosted speculation that the United States could continue its two-year monetary tightening cycle and lift rates from 5.25 percent next month.


For Daily Alerts
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more